Capital & Counties scrubbed £131 million off the value of its Earls Court development on Wednesday as it paid the price for a still-sluggish London property market.
The latest hit, cutting the value of the regeneration scheme to £1 billion, means Capco has written down the scheme by 29% since 2015.
Capco is also under political pressure over its 6500-home masterplan, of which 20% are affordable, after Hammersmith and Fulham’s council leader recently demanded it return two of the estates under the original proposals amid concerns over the amount of affordable housing.
Capco has a binding agreement over the sale of the West Kensington and Gibbs Green estates, carried out before the council fell to Labour, and called Hammersmith’s statement a “disappointment”.
Chief executive Ian Hawksworth said talks were continuing with the council to reflect changing political and market conditions: “We think there is an opportunity to evolve and enhance the overall masterplan to provide more housing across all tenures,” he said.
The shares lost 10.5p to 268.4p.
But a bumpy road ahead looks likely, however, as the firm added “there will remain a risk of protests and legal challenges” throughout the course of the development.
Capco has sold half of the 186 flats in the second phase of its Lillie Square scheme. Of these 34 changed hands last year but just seven in the second half of 2017.
The company’s woes at Earls Court were almost offset by its £2.5 billion Covent Garden portfolio, which rose in value by £93 million last year.