Developer Capital & Counties’ troubled Earl’s Court redevelopment project took another battering on Friday as £49 million was wiped off the value on one part of the site amid a gloomy property market.
Capco, which is working on a £12 billion masterplan to create 7500 new homes in Earl’s Court, said one part of the land it has in a joint venture with Transport for London has suffered its fifth writedown in two years.
The plot was once home to Earl’s Court exhibition centres and has planning consent for 3.4 million square of new homes and commercial space.
A valuation from property agent JLL puts Capco’s stake in that site at £412 million in March, down 10.5% from last December.
Shares in Capco fell 3.1p to 210.2p.
Capco said the change takes into consideration “increased developer’s margin and total development cost assumptions as well as a more conservative view” on the value of the scheme when it completes.
Numis analyst Robert Duncan said: “In other words, the valuation continues to come under pressure from all angles and we do not believe that this will mark the end of the writedown cycle.”
It marks the latest pain for Capco in Earl’s Court where it has been grappling with higher taxes and Brexit hitting housing demand, and conflicts with Hammersmith & Fulham council over housing strategy.
The firm is exploring a possible de-merger of the division away from its larger Covent Garden estate. It has also been in talks about a potential outright sale at Earl’s Court.
Graeme Craig, director of commercial development at TfL, said: “Earls Court is one of the capital’s most important development opportunities and we are keen to see development progress as soon as possible.”
