Capco gets green light for Covent Garden estate development

Capital & Counties Properties (Capco) which is listed in London and on the JSE, said yesterday it was granted approval on Tuesday to build 45 more apartments in the Covent Garden estate, as well as shops and restaurants.

Capco has been given the go-ahead for another project at its Covent Garden estate, which it has been transforming into one of the UK capital’s prime retail destinations.

The approval allows the company to transform the space between King Street and Floral Street within Covent Garden.

The project will create a new pedestrian passageway connecting Long Acre and King Street, as well as a new public courtyard and new retail, restaurant and residential space.

Capco said the public courtyard would be surrounded by eight new retail units and two new restaurants.

CEO Ian Hawksworth said the plans “will have a significant impact on how visitors experience Covent Garden”.

“The new passageway will connect King Street directly to Long Acre for the first time and bring a critical mass of new retail, dining and residential to Floral Street,” Mr Hawksworth said.

Work on the project was likely to start in June next year and was expected to take up to three years to complete.

The company said it was also granted permission to convert the Carriage Hall building on the western end of Floral Street into a new, multibrand retail space with a covered courtyard.

The London property market has been easily outperforming the rest of the UK and valuations at Capco’s main assets — Covent Garden and Earls Court and Olympia — have continued to increase.

A large part of Capco’s focus at Covent Garden is on improving the tenant mix to house mainly contemporary luxury brands to drive up rentals and valuations.

Mr Hawksworth said in September this process was about halfway complete, thanks to 33 leasing transactions completed in the first half of this year. Brands recently introduced into the estate include Chanel, Dior and Shake Shack. Covent Garden has been valued at £1.1bn.

Meanwhile, Capco’s Earls Court master plan, which envisages a new district surrounded by wealthy residential areas such as Chelsea, is planned to eventually include about 8,000 new residential units and two high streets.

Capco in July reported what it called a “strong valuation performance” for the six months to June, with a 14% rise in adjusted, diluted net asset value to 232p per share, from 203p per share at the end of December. The company reported a 13% rise in its total property value to £2.1bn from £1.7bn. Capco’s share price has had a strong run since it was unbundled from Liberty International in May 2010 — with some analysts believing its stock already reflects future developments and valuation growth at Earls Court and Olympia. The company expects its first residential units at Earls Court, comprising an 800unit development, to be ready for occupation in late 2015.

But other analysts say Capco could still unlock further value at Covent Garden, where rentals remain below similar retail destinations around London.

Capco’s share price value has increased nearly two-and-a-half times since its unbundling three- and-a-half years ago.