APG and Delancey acquire Earls Court stake for £425m

APG and Delancey have exchanged contracts to acquire Capital & Counties’ stake in Earls Court for £425m. The deal is expected to complete before the end of the month and brings to an end one of the longest-running disputes in London real estate. The £425m offer is a 16% discount to the balance sheet value of £508m at 30 June. It will see the duo take over the 63% interest in the Earls Court Partnership investment vehicle, excluding Lillie Square, with Transport for London retaining the balance. Payments will be made on a phased basis, with 45% payable on completion and the remainder over the next two years. Capco will receive net proceeds of £156m from the initial payment, with £211m payable in two annual instalments. The sale has reduced Capco’s loan-to-value from 19% to 15% with undrawn facilities of over £900m. Ian Hawksworth, chief executive of Capco, said: “Having prepared Earls Court for future development, we are now pleased to have agreed terms for the sale of our interests to APG and Delancey (on behalf of its client fund), an experienced real estate investment partnership which, with the support of TfL, will take forward this important scheme for London. “Following the disposal, Capco will be a strongly capitalised property investment business centred around our landmark Covent Garden estate. The business is well positioned to generate attractive long-term returns for shareholders. Backed by a strong balance sheet and with a significant investment pipeline, our access to substantial liquidity will enable us to capitalise on opportunities.” The 27-acre site sits at the heart of a £12bn masterplan, which seeks to deliver 7,500 new homes over 3.4m sq ft and commercial space. Development has been on the cards for 10 years, but stalled amid a deadlock between the developer, Hammersmith & Fulham Council and residents. The site was put up for sale last year, attracting interest from a range of buyers including Hong Kong’s CK Asset Holdings, Berkeley Homes and Canary Wharf Group. In October, One Hyde Park tycoon Nick Candy’s Candy Ventures said it was considering a bid for the entirety of Cacpco. Following the announcement of the Earls Court sale to APG and Delancey, Candy Ventures said it does not intend to make an offer for the company. Last month, Hammersmith & Fulham Council outlined plans to acquire or CPO the site for £650m in the largest local authority real estate acquisition to date. To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette