Capital & Counties buys London properties

The London-focused landlord still has capital  available for more acquisitions. 

Real estate company Capital & Counties Properties on Monday said it has completed the sale of its interest in Earls Court, London, and now expects to convert to UK real estate investment trust status before the end of 2019. 

Capital & Counties Properties, which was spun out of SA businessman Donald Gordon’s Liberty International in 2010, is listed on the Johannesburg Stock Exchange

In mid-November, the FTSE 250-listed property investment & development company had agreed to sell its interests in Earls Court to APG and Delancey for £425 million.

At the time, the company said the sale - which excludes assets in Lillie Square, west London - is on a cash-free and debt-free basis and was in "the best interests of the company and shareholders as a whole".

On Monday, Capital & Counties said it has secured initial net proceeds from the asset sale of £156 million and expects to secure a further GBP211 million over the next two years. 

Turning to operations, the company said trading performance on its property estate remains "encouraging", with footfall growth and average tenant sales continuing to trend upwards. 

Meanwhile, the demand for office and residential space continued to be "strong", with high occupancy and rates of renewal. 

Looking ahead, Capital & Counties said its "strong" balance sheet and "significant" financial flexibility positions it to capitalise on further investment opportunities. 

The company said it has exchanged contracts to buy the freehold interest of 5-6 Henrietta Street, London, for £34 million, with completion expected later this week. 

Capital & Counties said the newly acquired building produces an annual rental income of £1.2 million across 14,300 square feet.

In addition, on November 19, the company purchased the freehold interest of Sussex Mansions, also located in London, for £17.8 million. The building comprises a restaurant let to pizzeria Franco Manca, plus office and residential space, which generates an annual rental income of £600,000. 

Capital & Counties also said it will target a progressive dividend policy over the medium-term by driving rental growth and securing income.