As widely trailed, Capital & Counties has sold its interest in Earls Court, excluding Lillie Square, to APG and Delancey for £425m.
Capco say this is consistent with their strategy of monetising investments at Earls Court over time with a focus on growing its central London property investment business, centred around Covent Garden. Completion of the transaction is expected to take place before the end of November 2019.
The Earls Court assets, held in a JV with Transport for London (TfL), were most recently valued on the Capco balance sheet at 30 June 2019 for £508 million. This itself was down from the peak valuation of just over £800m.
Payments will be made to Capco on a phased basis, with 45 per cent payable on completion and the balance over two years. Net proceeds from the initial payment are expected to be approximately £156 million (adjusting for net debt, transaction-related costs and other completion items). The balance of £211 million will be payable in two equal instalments,12 months and 24 months after completion.
Ian Hawksworth, Chief Executive of Capco, commented: “Having prepared Earls Court for future development, we are now pleased to have agreed terms for the sale of our interests to APG and Delancey, an experienced real estate investment partnership which, with the support of TfL will take forward this important scheme for London.”
The assets sold are a 63 per cent interest in Earls Court Partnership Limited (ECPL): the investment vehicle with TfL in respect of the site formerly the location of the Earls Court exhibition centres and certain assets on and around Lillie Road valued at £389 million (Capco’s share of ECPL net debt as at 30 June 2019 was approximately £38 million). It also includes other related assets around Earls Court valued at £36 million and Capco’s interests in respect of the Conditional Land Sale Agreement (CLSA) in relation to the West Kensington and Gibbs Green Estates, comprising prepayments and capitalised costs, with a carrying value of £83 million.
