Brexit cuts 14% off value of Earls Court

Capital & Counties (Capco) has revised down the value of its mammoth 7,500-home Earls Court scheme by 14% to £1.2bn, blaming the impact of the UK’s vote for Brexit.

The developer - which reported half-year results to June 2016 this morning - had previously valued its Earls Court regeneration scheme at £1.4bn.

Capco said the downward move was prompted by its “valuers’ assessment of the weakened sentiment in the central London residential market following the EU referendum”, including a “more cautious view” of costs and potential sales at early residential phase Lillie Square.

Phase one of Lillie Square is “predominantly sold”, with construction underway, but sales at phase two have been slower than hoped. Nonetheless, the developer said 59% of the first release of phase two homes are now reserved for sale, with four reservations secured post-referendum.

Commenting on the EU referendum, Capco said it was “too early to make firm predictions [but] we remain confident in our estates and current conditions on the ground remain positive”. At Covent Garden, where the firm has substantial property holdings, the firm has signed three leases for space since the referendum.

The firm added: “At Earls Court, we will continue to progress with land enablement and planning activities as we prepare the site for the future.”

Capco posted a £109m loss for the half-year period, compared to a £263.9m profit the previous year.