CapCo mulls sale of Earl’s Court site

Selling its R14bn Earl’s Court London residential development would make life a lot easier for JSE-listed Capital & Counties (CapCo), which wants to focus on its retail success, the iconic Covent Garden.

Late on Monday, Hong Kong property tycoon Li Ka-shing said his CK Asset Holdings wanted to buy 90% of the Earl’s Court development.

CapCo CEO Ian Hawksworth has been under pressure to split the company into two firms as its UK-based assets — Covent Garden and Earl’s Court — have not performed in tandem. One company would own the Covent Garden retail centre and one would own residential asset Earl’s Court.

CapCo has taken 10 years to prepare the 31ha residential site for one of the most ambitious housing developments in London’s modern history. It wants to build £707m worth of luxury houses on the site.

Construction is already under way on about 800 homes at Lillie Square, part of the site owned in a venture with Hong Kong’s Kwok family. This part of Earl’s Court would not be sold to CK Asset Holdings.

Hawksworth had wanted Covent Garden to be launched as an independent, prime central London retail-focused real estate investment trust. The second business would be a London development firm centred on Earl’s Court.

Peter Clark, a portfolio manager at Investec Asset Management, said the deal “would be a good thing if CapCo could sell Earl’s Court at a decent valuation. This creates a clearer investment case for the remaining Covent Garden business.”

CapCo said in a statement on Monday it was considering a number of proposals in relation to its interests in Earl’s Court.

“This includes discussions with CK Asset Holdings Limited regarding a conditional proposal for the sale of substantially all of Capco’s interests in Earl’s Court Properties, excluding the Lillie Square joint venture.”

Hakwsworth was unavailable for comment on Tuesday.