The value of Cadogan’s Kensington and Chelsea property estate has leapt to a new peak, the group’s Annual Report reveals.
The results show that total returns for 2014 hit 17.2 per cent, contributing to a five year annual average of 15.9 per cent. Rental income increased by 6.5 per cent to £119.9 million, while the value of the group’s property assets jumped to a record of almost £5.2 billion.
The outstanding sector of the portfolio was offices, with an annual growth in value of 22.2 per cent. Retail enjoyed annual growth of 14.8 per cent, followed by residential which increased by 11.3 per cent. Rental growth and continuing yield compression was recorded across most locations.
“The business has enjoyed a successful year in 2014 with total returns of 17.2 per cent contributing to an annualised performance over the last five years of 15.9 per cent, which we focus on as a longer term measure,” said Chief Executive Hugh Seaborn.
“The success of Cadogan is allied to the strength of the London property market which performed strongly last year, both from an investment and an occupational perspective.”
The group has continued with its property management strategy of improving the quality of its assets through redevelopment and refurbishment, and has invested £100 million in new acquisitions. These include retail units in the Kings Road and Sloane Street, enabling Cadogan to enhance the retail offer of both streets.
Sloane Street has also benefitted from the rolling out of Cadogan’s five year strategy for the transformation of the public realm, designed to create a more welcoming environment for pedestrians.
This has involved extensive consultations with the Royal Borough of Kensington and Chelsea along with local businesses and retailers. Cadogan is looking forward to continuing this process ahead of the implementation of the proposals over the coming years.
Discussing the performance and the future prospects of the group, Hugh Seaborn said: “In the retail sector, retailers are improving their understanding of how physical space fits within their overall multichannel strategies.
“When they seek a physical presence they are becoming more discerning about the location, quality and overall ‘experience’ provided by the space they take and this benefits our strong retail locations and ability to manage the area cohesively.
“We have new and refurbished office space coming onto the market in 2015 and are confident that we will be able to let this on good terms and at attractive rents given the strength of demand across London and the increasing desire for businesses to provide a great ‘lifestyle’ location for their staff.
Seaborn concluded by saying that Cadogan remains confident that their long-term strategy will continue to deliver consistent and attractive returns throughout 2015 and beyond.
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