Capco has posted a cautious set of numbers, with a big dent in valuations following the vote to leave the EU, and some impact on sales, but with the long term programme on track.
Capco’s Earls Court interests are now valued at £1.2 billion, a decrease of 14 per cent (like-for-like) on the December 2015 valuation of £1.4 billion, largely due to weakened sentiment in London residential markets following the UK’s exit vote from the EU. However, Capco say their long-term plans for Earls Court are on track, with the demolition of the exhibition centres progressing well, and Lillie Square phase 1 construction on plan with the first completions expected later this year.
In addition, 59 per cent of the first release of Lillie Square (pictured) phase 2 has been reserved at prices 4 per cent higher than comparable units in phase 1.
Olympia, the exhibition venue, despite being “non-core” for Capco, has generated some useful revenues, up 9 per cent to £11 million before tax for the first half of the year, and Capco say that, following a review, they will keep hold of the business.
The report says that since it exercised its option under the Conditional Land Sale Agreement (“CLSA”) to buy the West Kensington and Gibbs Green Estates from LB Hammersmith & Fulham, Capco has paid £45 million of the £105 million cash
consideration payable including the first of five annual instalments of £15 million which was paid in December 2015. They say plans are progressing towards the construction of Block D of Lillie Square to facilitate the first phase of the decant for theWest Kensington and Gibbs Green estate.
Overall, Lillie Square will deliver 608 private and 200 affordable homes across three phases. Since its 2014 launch, 44 per cent has been pre-sold representing
over £300 million of sales. Phase 1 is predominantly sold at an average price per square
foot price of circa £1,500, including a penthouse sold for £6.3 million in January 2016.
Construction of Phase 1 is underway and, say Capco, is progressing positively with first completions on track for delivery later in the year.
In Phase 2, 70 units have been released for sale and 41 have been reserved or exchanged, four since the EU referendum. However, Capco say the rate of sales has been slow
with the uncertainty in the weeks leading up to the EU referendum impacting buyers’ decisions.
Ian Hawksworth, Chief Executive of Capco, commented: “At Earls Court, we continue to make positive progress on site. Whilst the last quarter has been characterised by uncertainty in the London market as a whole, the value of this estate will increasingly be realised in the years ahead”.