FACE TO FACE: There are plenty of barriers to development but it is dominant landholdings and place-making that ultimately create value. That was the view of Capital & Counties chief executive Ian Hawksworth at an Estates Gazette/Profile Face to Face event at Atlantic House, EC1, yesterday.
Hawksworth said that many in the market did not initially understand CapCo’s investment into its London estates. It was thought to have overpaid for Covent Garden – it splashed out more than £400m on the estate in 2006 – and Earls Court was considered “very unfashionable”. But the investments are paying off, said Hawksworth.
He believes that Covent Garden is significantly under-rented with zone-A rents on the estate potentially less than 50% of that of rival areas. Earls Court, he said, offered huge potential to create a lot of value over the next 10-15 years.
“CapCo is a business that has got a very interesting role to play in the London market and I am keen that it continues to do ambitious and complex things,” he said. “The philosophy for CapCo has always been to be entrepreneurial and to take measured risks and create place.”
But Hawksworth said it would always be difficult to create large-scale development in London, not merely because of political issues but because of social issues too, with people generally liking things to stay as they are.
A lack of development skill within the industry was singled out as one of the biggest threats.
“There is a definite skills shortage throughout the industry, which is particularly noticeable in development. If is one of the areas in global real estate – not just the UK – that is talent deprived. I’m not sure the industry is training them,” said Hawksworth.
