Cadogan Announces 2022 Annual Results
“If 2021 was a year of recovery then 2022 was one where we finally emerged from the long shadow of the pandemic and benefited from our carefully targeted support and investment to deliver a robust performance.” – Hugh Seaborn, Chief Executive
Resilient performance across the portfolio is underpinned by significant investment and support for the community to aid recovery from the challenges of the pandemic and resulting economic headwinds. Good progress was also made towards achieving sustainability goals, including 10% carbon saving and 12.3% increase in urban greening factor.
Total income increased by 10.4% to £186.5 million, while the property portfolio value increasing by £263million (5.4%) to £5.1 billion (2021: £4.8 billion), demonstrating healthy growth. Operating profit before capital items of £98.4 million was down 2.4% (2021: £100.8 million) due to an increase in property expenses as investment increased in major placemaking and development projects.
Investing in the long-term success of Chelsea
Cadogan’s long-term stewardship ensures the curation of residential, retail, hospitality, leisure and cultural uses across the estate, strengthening Chelsea’s enduring appeal. Development, refurbishment and placemaking continued at pace throughout the year, with a strong pipeline of projects at the end of 2022, of which eight were under construction. Highlights include:
– Commencement of £46million public realm and urban greening project on Sloane Street, in partnership with the Royal Borough of Kensington and Chelsea
– Completion of Pavilion Road, including full pedestrianisation to further enhance this community destination and ‘village high street’ with its artisan food shops
– Focus on leisure and F&B strategy to increase vibrancy and support retail – more than doubling the Estate’s food and drink offer over the last five years, with further signings in 2022 including ‘Cantinetta Antinori’, the first London restaurant from Tuscan winemaking dynasty the Antinori family and a new opening from David Yeo’s award-winning Aqua group
– Restoration and conversion of 1 Sloane Gardens from an Edwardian apartment block into a boutique hotel and restaurant, to be operated by the celebrated Parisian hotelier and restaurateur Jean-Louis Costes, opening in 2023
– Redevelopment of 196/222 King’s Road, a 100,000sq ft site which will enhance the central section of the King’s Road and include community and flagship retail, affordable and market- let homes, independent cinema operated by Curzon, improved Waitrose, rooftop bar, and pub in addition to a significant public art installation inspired by Chelsea’s rich artistic heritage
Contributing towards a sustainable and thriving local community
Central to Cadogan’s approach is its commitment to a sustainable environment, protecting the area’s unique heritage and supporting a thriving community. Post pandemic, Cadogan has continued to provide financial support to occupiers, local charities, and the NHS, through its £20 million Business Community Fund. Additionally, the business deployed extensive marketing campaigns and introduced new provisions such as al fresco dining, to encourage visitors back to the vibrant neighbourhood, supporting occupier’s quick return to financial health.
Cadogan continued to work progressively towards ambitious targets set out in its ’Chelsea 2030’ sustainability strategy during the year. Highlights include:
– Carbon saving of 10%, in addition to launch of comprehensive Estate-wide £90 million decarbonisation programme to improve energy efficiency
– 12.3% increase in Urban Greening Factor, including further pocket forests, natural ponds and beehives to foster biodiversity – and innovative partnership with Gentian, using satellite data to map opportunities for living roofs across Chelsea
– Longstanding community support extended through rent freezes across community and keyworker housing portfolio (which it continues to subsidise by £1.3million each year), to ease cost-of-living pressures for those most in need, along with significant skills and training opportunities across the local community
– Introduction of new electric cargo bike waste scheme and extensive freight and logistics survey launched to further reduce pollution and congestion
Cadogan continually seeks to improve and build upon its customer experience and remains committed to fostering long lasting relationships and contributing to a strong sense of community. Customer research and feedback plays a key role in helping shape the business strategy and in 2022, Cadogan was delighted that an independent survey reported combined residential and commercial customer satisfaction at 88.9% (+4.9% YoY) and awarded a Net Promoter Score of 64.4 (almost double the industry average of 30). As part of its commitment to community engagement, Cadogan also initiated and lead the creation of two new Business Improvement Districts (BIDs), The King’s Road Partnership and The Knightsbridge Partnership.
Hugh Seaborn, Chief Executive of Cadogan commented: “If 2021 was a year of recovery then 2022 was one where we finally emerged from the long shadow of the pandemic and benefited from our carefully targeted support and investment to deliver a robust performance.
“This performance was driven by many factors, among them our commitment to continue investing in the future of the area through major development projects and significant support for the community during challenging times, along with initiatives to help us meet our ambitious environmental targets.
“As a long-term family business, stewardship – the responsible management of resources for the benefit of current and future generations – has been at the heart of everything we do. We are able to anticipate and respond swiftly to the changing needs of customers and markets.
“As London reopens and welcomes back international visitors, we are seeing strong recovery and healthy demand across the Estate. Moving into the year ahead we remain confident in our strategy and the strength of our diverse and high-quality portfolio.”
Portfolio overview
Retail and Leisure
2022 saw increasingly buoyant retail leasing activity and total retail rental gross income increasing by 7.1% to £86.3 million (2021: £80.6 million). Footfall grew steadily and, from April 2022 onwards, consistently surpassed 2019 levels, resulting in higher turnover and profitability for retail occupiers than in 2019.
Cadogan experienced a healthy demand from new brands wishing to enter the area and existing brands seeking to expand locally. These included pre-loved luxury from Lampoo, LA women’s label Anine Bing, sustainably driven women’s fashion from Reformation and chic fragrance brand Diptyque. Significant upsizes included great British brands Rixo with a new concept store, further innovation and expansion from Anya Hindmarch with her ‘Village’ and a striking new space for Emilia Wickstead. International luxury houses Dior and Valentino each committed to doubling their presence on Sloane Street.
The leisure sector remains integral to Cadogan’s strategic estate management approach, as it contributes so strongly to the identity and appeal of Chelsea for residents and visitors alike. Strengthening the food offer on Sloane Street, Cadogan secured the first London restaurant from Tuscany’s famed wine-makers the Antinori family with ‘Cantinetta Antinori’ and another from award-winning restaurant group Aqua, led by David Yeo, opening in Autumn 2023. Additionally, in December 2022, Cadogan acquired the Draycott Hotel on Cadogan Gardens and separately, looks forward to opening the latest hotel at 1 Sloane Gardens in 2023.
Offices
The office portfolio remained virtually fully let throughout 2022. Total gross income increased by 16.0% to £39.1 million (2021: £33.7 million) with activity across London continuing to recover thanks to its magnetic pull as a world capital offering access to the best talent, finance, culture and services. Neighbourhoods such as Chelsea have enduring appeal thanks to the vibrant local environment and lifestyle.
Residential
Residential remains the second largest sector, after retail. There was strong demand for short-let flats and houses coupled to a limited availability of quality units, translating into healthy rental growth. The business was able to take advantage of the strong letting market and boost rental growth to deliver its highest ever residential income. Total gross residential rental income increased by 8.2% to £39.5 million (2021: £36.5 million).
Read the full 2022 Annual Report