West End landlord Capco saw its portfolio value plummet by 26% in 2020, as the Covid-19 pandemic wrought havoc on its retail and hospitality tenants.
Capco’s estate, almost all of which is in Covent Garden, was valued at £1.9bn at the end of last year, down from £2.8bn before the pandemic struck, while net rental income was down 74% year-on-year at £16m.
The London-listed firm collected just 62% of rent owed to it throughout the year. Collection for 2021 so far stands at 47%, with non-essential retailers still unable to trade during the third lockdown.
Nearly three-quarters of the company’s tenants are retail and hospitality firms. However, it said that “only a small number” had fallen into administration, representing £4m of passing rent.
Ian Hawksworth, Capco’s chief executive, said: “Capco’s financial strength has allowed us to support our customers and business partners whilst taking advantage of market opportunities during an unprecedented year which significantly impacted rents and property valuations.
“As a long-term investor, we are optimistic about the enduring appeal of Covent Garden and London’s West End and are confident that Capco is well-positioned to benefit from London’s economic recovery.”
While the pandemic has significantly reduced West End footfall and international tourism, a big concern for the company is how Covid-19 will affect consumer behaviour going forward.
“The long-term impact of Covid-19 on future demand for and use of lettable space, evolution of consumer behaviour (including an acceleration of trends in online shopping) and travel patterns could have further implications for the real estate market and our portfolio,” it said.
Despite the pressures, it spent £501m on its 25.2% stake in neighbouring landlord Shaftesbury, which owns around 600 buildings in the West End.
The group’s net debt to gross assets ratio rose to 28%, up from 15% the previous year.
Capco chairman Henry Staunton added: “2020 was an extraordinary year with significant market uncertainty. Capco’s support to its people, customers and broader Covent Garden community ensures the business is well-positioned to benefit from a recovery and prosper over time.
“We remain focused on responsible stewardship, disciplined capital management and are committed to delivering long-term value for shareholders from our unique portfolio of West End focused investments.”
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