Capital & Counties net asset value slides on Covent Garden revaluation
Capital & Counties has reported a decline in net asset value (NAV) after the property group was hit by a decline in value of its Covent Garden holdings.
The figures
The real estate investment trust, which is listed in London and Johannesburg, said its EPRA NAV per share declined 10 per cent in 2019 to 292.9p. Overall, Capital & Counties’ (Capco) EPRA NAV declined from £2.8bn to £2.5bn.
The total value of Capco’s property portfolio dropped as estimated rental value caused a drop in valuation on its Covent Garden property.
The group swung to a pre-tax loss of £61.3m for the year, compared to a pre-tax profit of £41.6m in 2018, with the company taking a £43.3m hit on the Covent Garden revaluation and sale of some of its holdings.
Revenue climbed 6.3 per cent to hit £79.4m, while net rental income rose 6.4 per cent to £61.1m.
Equity attributable to Capco’s owners slipped 9.5 per cent from £2.7bn in 2018 to £2.5bn.
Capco maintained an annual dividend of 1.5p per share. Shares in the property group fell 1.59 per cent in morning trading.
Why it’s interesting
Capco is continuing to focus on its West End and Covent Garden holdings. The company said that while the West End has proved more resilient than the wider UK real estate market, it was still “not unaffected by the well-documented challenges in the retail sector”.
In October, shares jumped after it emerged that property tycoon Nick Candy was considering a possible offer for the group.
However Candy Ventures backed down after Capco sold off its Earls Court property for £425m, a substantial loss on the £759m valuation it had received in 2018.
The company said today that “no substantive approach regarding an offer” had been made by Candy or any other party.
What Capco said
“Capco looks forward to the next phase of growth, with a strategic focus on the West End and Covent Garden, where we have created a world-class estate,” said chief executive Ian Hawksworth.
“As a strongly capitalised real estate investment trust, with access to substantial liquidity, Capco is well-positioned to take advantage of investment opportunities whilst also offering resilience during periods of economic uncertainty,” he added.
“Our creative approach to leasing and asset management continues to contribute to increased footfall and tenant sales at Covent Garden, giving us confidence in the long-term prospects of the business to deliver superior total returns to our shareholders.”