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Capco CEO seeks to calm London resi slowdown fears; CLS Holdings exits Sweden


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Capco CEO seeks to calm London resi slowdown fears; CLS Holdings exits Sweden

Capco CEO aimsto quell fears of London resi slowdown

London-focuseddeveloper Capital & CountiesProperties Plc sought to calm fears about slow sales at its Lillie Squaredevelopment in Earls Court, west London, in a business update for the periodbetween Jan. 1 to May 6. The company said that 37 out of 70 units had beenexchanged or reserved in phase 2 of the development. CEO Ian Hawksworth alsosaid that its Covent Garden scheme in London was on track to hit an estimatedrental values target of £100 million by December 2017.

Short-sellershave dumped shares in the company earlier this year thanks to concerns aboutthe slump in the market for high-end homes in the British capital, London's Financial Times said.Capco has also drawn flak from analysts in recent months. Jefferies' Mike Prewsaid in February that there was a risk of oversupply of high-end residential inthe vicinity of Earls Court, and also remarked that there was "no room forslippage" in delivering income growth at Covent Garden, which is valued onan "exceptionally" low yield of 2.1%.

However,the team at J.P. Morgan Cazenove were less gloomy on the stock in a May 6analyst note. While the team said that they were apprehensive about the marketfor London residential property priced at over £1,500 per square foot, theyfelt that Capco was "strongly positioned financially", and with aloan to value of just 18%, was capable of weathering a downturn.

Capital markets

*Italy's COIMA RESS.p.A. won the approval of the Italian regulator, CommissioneNazionale per le Società e la Borsa, for its IPO. The prospectusis related to COIMA's proposed trading of shares on the Mercato TelematicoAzionario, or MTA.

An eye on earnings

*Intu Properties Plcproperties said in atrading update for the period from Jan. 1 to May 4 that its debt to asset ratiowas 41%, and that it had cash and available facilities of over £750 million asat March 31.

*Emaar Properties PJSCnet profit for the first quarter grew 17% year over year to around 1.21 billion UnitedArab Emirates dirhams. Revenues rose 17% to around 3.53 billion dirhams duringthe quarter compared to the equivalent period in 2015.

*InterContinental Hotels GroupPlc reported that group RevPAR rose 1.5% year over year inthe first quarter. However, while the Americas, Greater China and Europe postedgains, RevPAR in Asia, Africa and the Middle East declined, due to acombination of weak oil markets and an early Easter.

*Derwent London Plcsaid in itsfirst-quarter business update that it plans to divest around £100 million ofproperty in 2016.

*Redefine PropertiesLtd. saidthat it would pay an interim dividend of 41.7 South African cents for thehalf-year ended Feb. 29.


*The UBS Swiss Real Estate Bubble Index fell for the first time in two years inthe January to March period, Bloomberg News reported.Slowing demand for investment properties and muted lending were responsible forthe decline.

*The European Investment Bank's deal to lend £1 billion for affordable housingconstruction in the U.K. has come with a warning attached, accordingto the Financial Times. The bank saidthat an exit from the EU in June's referendum could jeopardize its activitiesin the U.K.

*Sales of high-end homes in exclusive London districts such as Kensington andChelsea dropped to their lowest level since 2009 following an increase in stampduty tax brought in by the government in April, The Wall Street Journal reported,citing local agent Huntly Hooper. Only 125 prime central London homestransacted during the month, according to the report.

In other news

*British-based developer CLSHoldings Plc exited the Swedish market with the 590 million Swedishkronor sale of an investment property in Vänersborg.

*South African REITs have been tapping the property sector in Central andEastern Europe over the last 12 months, and the trend is expected to continue,according to a statement from JLL. Political instability and increasing risk inthe South African market are prompting companies such as to buy in theCEE region as they search for good quality, high-yielding properties.

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S&P Global Market Intelligence presents aweekly rundown of recent significant management and board changes and personnelmoves in the European and Asia-Pacific real estate industries.

In a series of intimate seminars at the British GRI gatheringin London, delegates debated themes such as the future of the London officemarket, the outlook for the retail market and the wider state of the Britisheconomy.