Cap & Count Share Price (CAPC)

Tempus writes that strength of the Central London property market never ceases to amaze. Capital & Counties Properties, whose Covent Garden estate is its main asset, has lifted the estimated rental value of those properties to between £60m and £65m by the end of 2015; only in March, it was shooting for £50m by the end of 2013. The new estimate was part of a £149m cashraising in September; Capco has pledged to spend £200m on Covent Garden, which was valued at £850m in June, and has already spent more than £60m since then. This includes a deal for a corner site at a little more than £800 a sq ft, against an average £1,000 per sq ft for the estate as a whole. Capco shares, below 200p in May, have risen to reflect the prospects for Covent Garden. They are on a 13% premium to estimated net asset value, in line with equivalent London property companies, and look about up with events, Tempus says.

The book building process, where the group's agents gauge interest in the placing in the market, is expected to close no later than 16:30 (London time) on Wednesday, but may be closed earlier or later at the discretion of the joint book-runners. As at August 31st 2012, Capco's gross debt was £400m and the cash balance was £127m, resulting in net debt of £273m, an improvement on the net debt figure of £397m just two months earlier. Based on June 30th property values, and adjusted for the sales completed in the second half of 2012, the pro forma debt to assets ratio was 18%, the company revealed, down from 24% at the end of June. The valuation of Covent Garden was upgraded in June by 4.5% to £856m. The group's site at Earl's Court saw its value lifted 4.6% to £620m.

Central London property investor Capital & Counties (Capco) has announced a share placing to fund acquisitions and developments at its flagship Covent Garden estate. The placing will see the company issue 68.4m new shares, representing 9.99% of Capco's current issued share capital. Up to 30% of the placing will be denominated in Rand. Capco wants to use the money raised to fund an expansion of the luxury food offering at Covent Garden and reposition assets towards higher value uses, in particular converting upper floors from office to residential use. Capco expects to complete over £50m of acquisitions in 2012, of which £18m have completed year-to-date and a further £24m are expected to complete in the next month. On top of that, there is a large pipeline of further acquisitions. Identified projects are forecast to require around £30m of capital expenditure over the next 12-18 months, which include further tenant engineering as well as capital expenditure for the next two residential conversion projects which have planning consent, namely The Beecham and 30-32 Southampton Street. The placing price has yet to be determined, but Capco's current market capitalisation is £1.5bn, which suggests the placing will be aiming to raise in excess of £150m. The statement indicated the company's plans for the site will cost around £200m which is possibly a better indicator of the placing target.

The London Borough of Hammersmith & Fulham (LBHF) has passed a resolution to grant outline planning permission for the redevelopment of parts of Earls Court in west London. The so-called Earls Court Masterplan will comprise 10.1m square feet of development, including homes (around 1,500 of which will be affordable housing units), offices, hotels, work space, education, cultural and community facilities, as well as a new five acre park for London. The news was welcomed by property company Capital & Counties (Capco), which holds a stake in the development, along with Transport for London and the LBHF. "We are pleased by the council's decision to pass the resolution to grant outline planning consent for the Earls Court Masterplan. The proposed scheme will offer a multi-billion pound investment in both London and the local community creating thousands of new homes and jobs," said Ian Hawksworth, Chief Executive of Capco. It is not quite all systems go for the project, yet, however, as the development sprawls across two boroughs, and the Royal Borough of Kensington & Chelsea (RBKC) has yet to make a decision on the outline planning application. RBKC is expected to make its pronouncement in the coming months. Capco already has planning consent for the 7.5 acre Seagrave Road site in the LBHF, where the plan is to build 808 homes around a public garden square on the site of what is currently a car park. These homes will constitute the major residential component of West Brompton Village. Capco has a conditional agreement with the Kwok Family Interests to form a 50/50 joint venture to develop the scheme.

London property specialist Capital and Counties Properties (Capco) has completed the creation of a 50:50 joint venture (JV) with some members of the Kwok family, meaning the development in and around the Seagrave Road site in on track to begin next year. The Kwok family are major shareholders of Sun Hung Kai Properties, one of the largest real estate firms listed in Hong Kong. On completion of the JV, Capco received a cash consideration of around £67m from the Kwok family for its 50% share. Ian Hawksworth, Chief Executive of Capco said: "We are pleased to have completed our joint venture agreement in relation to the Seagrave Road project and look forward to starting on site in 2013 to create this exciting new residential quarter for London."

Seymour Pierce maintained its "buy" recommendation for Capital & Counties Properties (CAPC), with an increased target price of 233p, from 220p. The broker expects the property developer to finish the 2012 financial year with a net asset value of 191p, rising to 214p by the end of 2013. Seymour Pierce noted that the firm's Covent Garden and Great Capital Partnership estates have outperformed and the broker added that if outline planning approval is given for the firm's proposed Earls Court project it could be a significant share price catalyst. The shares inched up by 0.6p to 218.9p.