LONDON (ShareCast) - (Sharecast News) - Capital & Counties said on Tuesday that the value of its Covent Garden estate fell by 17% as the coronavirus pandemic took its toll on the company's tenants, many of whom were forced to close their doors in March.
As at the end of June, the estate had a total value of £2.2bn, down from £2.6bn at the end of December 2019. Capco said that "substantially all" of the valuation movement relates to the retail, leisure and food & beverage portfolio, which represents 75% of the total property value.

The company said it began the year with a strong leasing pipeline but activity levels were dented by the pandemic from early February onwards. It said a small number of tenants entered into administration, representing £3m of passing rent.

Capco said the majority of retail and food & beverage tenants across its estate were forced to close on 23 March, when the lockdown was imposed.

"As a long-term investor in the estate, Capco took early action ensuring the safety and security of Covent Garden whilst also providing support on a case by case basis to customers experiencing cash flow challenges as a result of Covid-19. This supports the reopening of stores during this period of significant disruption, ensuring the business is well positioned to benefit from a recovery and prosper over the medium-term.

"Bespoke solutions have been agreed which include rent deferrals, rent-free periods and other arrangements reflecting the position of each customer. For certain tenants which are experiencing short-term cash flow issues, rental agreements will be linked to turnover for the second half of the year in exchange for other provisions such as lease extensions."

Capco collected 98% of its first-quarter rents, but just 44% of its second-quarter rent and 27% of its rent for the third quarter. Overall, 71% of rent has been collected in the first six months of the year compared to 99% for the same period a year ago.

The company said it was implementing a number of marketing initiatives and collaborating with stakeholders to promote Covent Garden and the West End, encouraging a return of footfall to more normal levels. It pointed out that Covent Garden now hosts a new al fresco, socially-distanced dining area on the Piazza.

"The majority of retail and hospitality customers on the estate have reopened or are set to reopen imminently. Whilst initial indicators are encouraging, the trading environment remains challenging.

"It is too early to predict when footfall will return to previous levels whilst physical office occupancy remains significantly reduced, and with the ongoing travel restrictions and fragile consumer sentiment."

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