Shaftesbury and Capco, two major property companies in Central London, have recently announced their plans to merge after months of negotiations. This merger will create a powerhouse in the real estate market, combining their extensive portfolios which include key areas such as Covent Garden, Seven Dials, Soho, and Carnaby.
Under the proposed scheme, Shaftesbury shareholders will own 53% of the merged group, with Capco shareholders owning the remaining 47%. Capco currently holds approximately 97 million shares of Shaftesbury, which is equivalent to 25.2% of its total issued share capital. Once finalized, the merged company will operate under the name Shaftesbury Capital.
The merger brings together two esteemed real estate companies, both with properties located in some of London’s most iconic areas in the West End. Their combined portfolio is estimated to be worth around £5 billion, with an annual gross income of approximately £165.5 million and an estimated rental value of £218 million. This impressive portfolio consists of approximately 670 predominantly freehold buildings, comprising 2.9 million square feet of lettable space across 2,000 commercial and residential units. Retail properties make up around 35% of the portfolio’s value, totaling £1.7 billion.
Apart from expanding their portfolio and market presence, the merger is expected to bring several advantages to the newly formed entity. These include a stronger balance sheet, improved trading liquidity, and an enhanced presence in the capital markets, therefore increasing opportunities to enhance their equity rating over time. Both companies are also committed to responsible stewardship and sustainable use of heritage and period properties, aiming to achieve Net Zero Carbon status by 2030 and become a leader in sustainability for heritage and period properties in the UK.
The leadership of the merged company will be Jonathan Nicholls as non-executive chairman and Ian Hawksworth as chief executive. The executive committee responsible for day-to-day management will consist of the CEO, CFO, COO, and three additional members.
As part of the transition, several longstanding directors will retire. Brian Bickell, who has served Shaftesbury for 36 years including 11 years as CEO, will step down. Executive directors Simon Quayle and Tom Welton, with 35 and 33 years of service at Shaftesbury respectively, will also leave the company. Additionally, Henry Staunton, Capco’s chairman with 12 years on the board, will retire.
Overall, the merger between Shaftesbury and Capco represents a significant development in the Central London property market. With their combined expertise and vast portfolios, the newly formed Shaftesbury Capital is well-positioned to play a leading role in shaping the future of the city’s real estate landscape.
Useful links:
– Shaftesbury
– Capco
