Covent Garden Landlord Slashes Estate’s Value by $547 Million

(Bloomberg) -- The main landlord of London's Covent Garden slashed the district's value by 400 million pounds ($547 million) in the second half of last year as lockdowns hammered its retail and restaurant tenants.

Capital & Counties Properties Plc's estate concentrated in the touristy West End district fell 13% to 1.8 billion pounds in the six months through December, according to a trading update Tuesday. Overall, the properties' value shed 27% last year as the capital continues to grapple with the devastating coronavirus.

“Whilst there are significant near-term challenges to trading and an uncertain economic outlook due to the impact of the pandemic, we are encouraged by the enduring appeal of Covent Garden,” Capital & Counties Chief Executive Officer Ian Hawksworth said in the statement.

Central London retail landlords had mostly been spared the U.K.'s retail crisis prior to 2020 as international tourists and a steady flow of high earning office workers kept footfall high. That was upended when the pandemic hit Britain last March with traveler numbers plunging and most workers staying home.

The company has collected 42% of the rent it was due for the first quarter of 2021 and made alternative arrangements for all but 6% of the remainder, the statement said. That's roughly in line with the collection figure posted by the landlord in the previous quarter.

The group's lenders have also granted waivers on some loan agreements for the year through December. The company said its property values could fall by a further 68% before it breaches loan-to-value covenants.

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