Capital & Counties NAV falls but remains upbeat for 2017

Capital & Counties Properties’ net asset value fell in 2016 due to changes in stamp duty and political uncertainty, although the property firm remained upbeat over its key London assets in Earls Court and Covent Garden.

The Covent Garden property introduced high quality retailers and restaurants last year which resulted in a record year of leasing transactions, producing an uplift in value of 6% to £2.3bn and an increase in estimated rental value (ERV) of 8% Capco said.

At Earls Court, the first phase of demolition was completed which de-risked the site and prepared the land for future development. Weakened sentiment in the residential market, following changes to stamp duty and political uncertainty, particularly in the first half of 2016, led to a 20% valuation decline at Earls Court to £1.1bn and as a result, the net asset value NAV fell 6%to 340p per share.

Total property value fell 4.4% on a like-for-like basis to £3.7bn in calendar 2016, compared to the previous year.

The company proposed final dividend of 1p per share providing a full-year dividend of 1.5p.

Capco said that its saw strong demand for retail space in London that has continued into 2017.

The FTSE 250 company increased its ERV target for Covent Garden to £125m by December 2020 to reflect the positive prospects of the estate. The first residents have moved into Lillie Square and additional units will be released over the coming months, now that the first release of phase two is predominantly sold.

Land enablement will continue at Earls Court and the company plans to increase the number of homes built on the site.

Chief executive Ian Hawksworth added: "Capco remains focused on its strategy to deliver long-term value creation from its two unique central London estates. Backed by a strong balance sheet with low loan-to-value and high liquidity, the group is well positioned to withstand short-term market uncertainty and take advantage of opportunities as they arise."