Earls Court debacle forces CapCo to demerge
Capital & Counties is to float off its Covent Garden estate as a standalone REIT after its performance was dragged down by the troubled redevelopment of the Earls Court exhibition centre in west London.
In a Stock Exchange announcement the company said: “Covent Garden London will be a central London focused REIT which owns and manages the Covent Garden estate, in the heart of London’s West End.
“This world-class mixed-use estate has a rich heritage, situated around the historic Covent Garden Market Building and Piazza, adjacent to the iconic Royal Opera House. Covent Garden is a highly attractive and globally recognised destination for occupiers and consumers. This carefully accumulated group of assets has provided, and the board believes will continue to provide, a source of long-term growth in income and capital value. The business will be targeting a progressive dividend policy through income growth and cost discipline, to deliver long-term sustainable returns.”
The assets were valued at £2.8bn at 30 June 2019.
The remaining business, holding the Earls Court site, will trade as EC Properties. It will attempt to bring in outside partners to reinvigorate the stalled project, which was valued at just £426m as at 30 June 2019.
Capco intends to complete before the end of 2019.