Risks and rewards: latest goings on with Earl’s Court developer

Capco perceives our community as a risk to its reputation

Capco’s interim results, published on 21 July, show that the valuation of its Earl’s Court properties has decreased again, this time by 2.4%, which is on top of the 20.4% decrease Capco reported in February. However, the company appears to have returned to profit, having made a loss of £223 million for the year ended 31 December 2016.

Capco’s financial position was boosted by the sale of the Olympia exhibition halls. As the company eloquently explained: “Having extracted significant value from the venue since acquisition, Capco took the decision to exit this non-core asset”.

As for Earl’s Court, its results state: “Capco remains focused on maximising the potential of the strategic land holding . . . Accordingly, representations have been made by Capco to the GLA’s London Plan to deliver 10,000 new homes, an additional 2,500 homes above the current consented scheme”.

Reputational risks Linda and David at our Summer Picnic

Meanwhile, Capco still insists that our campaign to save our community is a risk that might damage its reputation or distract its management. Its measures for mitigation are to “review activity and communications of activist groups”.

But it seems the company is looking in the wrong direction. Arguably, one of the biggest risks to Capco’s reputation is not us, but its own formal association with the Kwok family, with whom it is in a 50/50 joint venture for the development of 808 homes in Seagrave Road, otherwise known as Lillie Square.

The Kwok Family Interests (KFI) are major shareholders of Hong Kong property developers Sun Hung Kai (SHK). In 2014, SHK Chairman Thomas Kwok and his right hand man Thomas Chan, at that time a Director of Lillie Square GP, were convicted of bribing the second most senior official in Hong Kong, Rafael Hui, with HK$8.5 million. Thomas Kwok was sent to prison for five years, and Chan for six years in what has been widely described as the highest profile corruption case in the city’s history.

After serving 18 months in gaol, Kwok was released on bail pending the outcome of his appeal. A month ago, five judges of the Court of Final Appeal unanimously dismissed the appeal, confirming that Kwok’s and Chan’s actions were corrupt. Chief justice Geoffrey Ma Tao-li said: “It will now be necessary for [Kwok] to return to prison for him to serve out the remaining sentence.”

Thomas Kwok clutches the Bible as he climbs into the prison van

Despite these facts, on the Lillie Square website Capco and KFI persist in describing Sun Hung Kai as “one of the most highly reputable real estate companies listed on the Hong Kong Stock Exchange”.

But that is not the only misleading information published about Lillie Square. In a full-page advert printed in the Evening Standard on 3 May 2017, Capco and the Kwoks claimed that the latest Lillie Square apartments have “views over the Lost River Park or the landscaped garden square”. The advert trumpeted the so-called Lost River Park as “Central London’s largest new park in 100 years”.

Advert in Evening Standard with misleading claims about the so-called Lost River Park

Well, not only is Burgess Park a mile closer to Charing Cross, it’s 50 times larger. And, as for the view from the new flats over the so-called Lost River Park, given that it is little more than a path only a few metres wide, those views would likely be limited.

Capco’s latest results show that sales at Lillie Square are little more than one per week. At that rate it would take a century to sell the consented scheme, let alone the 2,500 flats it wants to add. Could this explain what’s going on?

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