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Covent Garden Landlord Writes Down Its London Estate Again as Demand Grows

Covent Garden. Shutterstock.
Covent Garden. Shutterstock.

The owner of most of London’s Covent Garden district has seen a bounce back in demand for space from stores and restaurants looking to cash in on London’s recovery.

Capital & Counties Properties Plc’s vacancy rate dipped slightly to 3.4 percent, as the landlord signed 29 new leases and renewals in the six months through June. That wasn’t enough to stop the value of its estate falling 5.1 percent but the rate of decline slowed sharply from the 13 percent drop in the prior six month period.

“There’s a long way to go but in the 14-15 years that we have been invested in the Covent Garden area this is the highest level of demand that we have seen,” chief executive officer Ian Hawksworth said in an interview.

CapCo gained 0.65 percent at 8:16 am in London trading.

Central London was emptied of the office workers and tourists that keep its stores and restaurants going, prompting many businesses to withhold rent during the peaks of the pandemic. As restrictions have eased, workers have started to come back with the city’s West End district at 73 percent of its pre-pandemic level in the week of July 22 according to Bloomberg’s Pret Index.

CapCo has collected about 65 percent of the rent it was due for the three months from June and the company now expects to reduce the amount of support it is giving to struggling tenants as restrictions ease, Hawksworth said. The company’s portfolio value fell to £1.8 billion ($2.5 billion) in the six months through June, a decline of £146.8 million.

The company has about 70 luxury apartments left to sell in its Lillie Square development in west London after a previous deal to bulk sell 49 apartments was restructured and reduced to 19. Deals for a further 10 homes that were pre-sold for about £13 million, failed to complete, according to the statement.

By Jack Sidders

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