Capital & Counties gets cash to help it expand Covent Garden

Marion Dakers
PROPERTY group Capital & Counties (Capco) yesterday raised £149.1m to help fund its ambitious plans for Covent Garden.

The firm placed 68.4m shares at 218p per share, or a 1.1 per cent discount to Tuesday’s closing price.

Capco said the funds will be used to help fund its £200m plans to snap up more properties and improve income at the Covent Garden estate over the next 12 to 18 months.

Capco has its eye on attracting new luxury retailers and restaurants to the area, as well as converting offices on the upper floors of some buildings into high-end flats.

It has also identified £50m of acquisitions to work on this year, including £18m that have already completed.

The company has been overhauling its Covent Garden portfolio since demerging from Liberty in 2010. It currently owns 54 properties in the area, including the famous covered market, the Apple store and a string of shops near the Royal Opera House.

The firm is targeting an estimated rental value of between £60m and £65m by 2015, which would support an estate valuation of almost £1.3bn.

“Capco will be robustly capitalised post the placing, which is necessary in our view for a business producing minimal earnings and where future net asset value growth is still highly geared into the potentially volatile land value cycle at Earls Court,” said analysts at Espirito Santo in a note.

Capco last week won its long-awaited planning permission for its £8bn redevelopment of Earls Court, which will see 7,500 new homes and a five-acre park built on the side of the exhibition centre and existing housing estates.

•Property group Hammerson yesterday launched a €500m seven-year bond issue to help fund its transformation into a retail-focused company. The firm said the sale was six times oversubscribed.