Capital and Counties will officially become a real estate investment trust (Reit) this year after selling off its vast Earls Court development site.
The FTSE 250 property giant said it is now a “prime central London property investment business centred around Covent Garden” after officially completing the sale of its stake in Earls Court to APG and Delancey for £425m.
Capco has suffered a huge writedown on the value of its Earls Court development scheme, which has faced troubles in the wake of a slowdown in demand for luxury housing and a political dispute with the local Labour-run council.
The sale of Capco’s interests in Earls Court completed successfully with initial net proceeds of £156m received and £211m to be received over the next two years, the group said.
In a statement this morning the group said: “The West End offers greater insulation from the well-documented wider retail challenges however it is not immune with certain retailers taking a more conservative view, as a result of broader political and macro-economic uncertainty and occupational cost pressures.
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“Nevertheless, trading performance on the estate remains encouraging with footfall growth and average tenant sales continuing to trend upwards.”
Shares in Capco have plunged by more than a third in the last five years, but have made a slight resurgence since this summer as speculation grew over its plans to offload its Earls Court site and focus on Covent Garden.
John Thalassites, lead member for planning and transport at the Royal Borough of Kensington and Chelsea (RBKC), said: “This brings much-needed certainty for the Earls Court site, which provides a major opportunity to create a new mixed-use neighbourhood with potential for new homes, jobs and cultural activities.”
He added: “We look forward to working with Delancey, local residents and our partners to shape the proposals, putting our communities first throughout the process.”