(Alliance News) - Capital & Counties Properties PLC on Tuesday said the value of its Covent Garden property has fallen since the end of 2019, but it remains confident in its long-term central London prospects.
The total property value for Capco's Covent Garden property has fallen 17% since the end of December to GBP2.2 billion at June 30. More or less all of the valuation movement comes from Capco's retail, leisure, and food & beverage portfolio which accounts for 75% of total property value.
The main contributors to the drop were a 12% like-for-like decline in estimated rental value plus yield expansion of 17 basis points to 3.8% and other movements such as the valuer's assumption of a loss of near-term income amounting to GBP31 million.
Nonetheless, the London-focused property investor remains "confident in the long-term resilience, attractiveness of and prospects for prime central London, in particular the West End."
Most of the retail and dining concepts within the Covent Garden estate have reopened and Capco said it has supported those retail and hospitality customers suffering "cash flow pressures". This support has been provided on a case by case basis and includes deferrals as well as arrangements linked to turnover "where appropriate".
The company has completes its acquisition of a 20.9% stake in Shaftesbury PLC and is set to acquire a further 5.3% stake provided shareholder approval is obtained.
Capco said it has a "strong balance sheet" and its loan to property value was 32%, with a net debt to gross assets ratio of 26% plus cash and undrawn facilities totalling GBP616 million.
In March, Capco received GBP90 million of deferred consideration from its Earls Court sale and another GBP105 million is due later in 2020 plus another GBP15 million in 2021.
Overall, 98% of first-quarter 2020 rents were collected but collection for its second and third quarter rent dates was "significantly lower than normal" with 44% collected in the second quarter and 27% in the third. Overall, for the first six months of 2020, 71% of rent has been collected versus 99% the year before.
tenants representing GBP3,0 million of passing rent went into administration during the first half of 2020 and EPRA vacancy has risen to 4.1% from 3.2%.
Shares in Capco were down 2.8% at 140.00 pence in London on Tuesday morning and were down 1.8% in Johannesburg at ZAR29.66.
By Anna Farley; annafarley@alliancenews.com
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