Capital & Counties (Capco) is in early talks with Canary Wharf Group over a possible sale of their Earls Court assets, it is reported, as the group announce the departure of their Earls Court chief.
A potential sale has been the subject of speculation and rumour since Capco restructured in to two divisions, one focussed on Covent Garden, and one on Earls Court – a 67:33 joint venture with fellow Ealrs Court landowner Transport for London. Last November, Hong Kong based CK Properties were linked with a potential acquisition, and there has even been speculation that Britain’s richest man, Ineos founder Jim Ratcliffe, might buy the assets as well as acquiring Chelsea FC from Roman Abramovich, and move the club there.
Bloomberg reports Canary Wharf Group, which is owned by the Qatar Investment Authority and Brookfield Asset Management, are only in early stage talks. But the continued links and rumours make a sale to someone seem more likely.
The Earls Court project has been controversial since a Conditional Land Sale Agreement was made by a previous council administration to include two Hammersmith & Fulham Council estates – West Kensington and Gibbs Green – in the project. The current council is opposed to this, and wants the estates given back.
The consent that Capco have, for a 7500 home Sir Terry Farrell masterplan delivering four new “villages” and a high street requires some revision to take account of changes in the economic environment since it was approved, and this is difficult without council collaboration, so the project is stalled with Capco. Capital & Counties cut the value of the project to £658m in its latest set of figures.
Capital & Counties has undertaken demolition and land remediation and says large parts of the site are now ready for construction work to begin. Construction of about 800 homes is under way at Lillie Square, owned jointly by Hong Kong’s Kwok family. Recently New York investor Madison International Realty took a 3.12% stake in Capital & Counties, calling the company “materially undervalued”. Ronald Dickerman, Madison’s founder and president described Earls Court as “a once-in-a-lifetime opportunity to redevelop a piece of prime London real estate”.
Capital & Counties have also announced that Gary Yardley, Managing Director & Chief Investment Officer, will step down from the Board and leave the Company on 30 June 2019. The roles will not currently be directly replaced on the Board.
The Company’s Earls Court investments will now be led by Mike Hood, Group Development Director (who has been appointed as Managing Director, Earls Court) as preparations advance for the possible demerger. Mike joined the Company in 2011, has operational responsibility for Earls Court.
Gary Yardley, Managing Director & Chief Investment Officer, said: “Capco is a special company with a remarkable investment portfolio and dedicated people. I am proud of the success we have achieved at Capco and in particular of the exciting and unique opportunity we have created at Earls Court, a project of significant vision and ambition. I wish Ian, my colleagues and the business every success for the future, as I take some time out to focus on my other interests and improving my health.”
Ian Hawksworth, Chief Executive, added: “Gary has shown commitment and enthusiasm to both the business and its people and I would like to extend my personal thanks to him for his significant contribution. We wish him well in his future plans, both personal and professional. Gary has developed a talented and experienced team at Earls Court and under Mike’s leadership they will ensure we remain focused on executing our strategy to maximise the potential of this unique London investment as we prepare for a separation of Covent Garden and Earls Court.”