Our 2019 Annual Report has been published

Results show strong operational performance in the face of significant political and economic uncertainty

Cadogan has published its results for the 12 months to 31 December 2019 showing strong operational performance in the face of significant political and economic uncertainty. The family business owns and manages 93 acres across Kensington and Chelsea.

Cadogan also outlined plans for a Business Community Fund which has set aside funding to deliver ongoing financial help, cash flow support and resources to tenants, partners and local charities to aid Chelsea’s longer-term recovery from the impact of the COVID-19 pandemic.

Last year’s activity was defined by major launches, including the LVMH-operated Belmond Cadogan Hotel and Pavilion Road, a new artisan food street. Following the COVID-19 outbreak, more than 250 local retail and leisure companies have received in excess of £15m of tailored financial support from Cadogan.

Cadogan announced solid progress in 2019. Total income grew by 9.7% to £185.9m (from £169.4m in 2018) and operating profit before capital items (an indicator of underlying operating performance as it excludes profit on the sale of investment properties and revaluation movements) increased from £98.1m to £105.8m, up 7.8%.

This strong performance of income and operational profit performance was offset by a reduction of 9.4% (-£581.4m) in the capital value of the portfolio, led by retail, which makes up 49.9% of the Estate by value.

Cadogan identified that Covid-19 had accelerated the structural changes in retail as more consumer transactions moved online during the lockdown period. In response, Cadogan emphasised its longstanding aim of creating exciting destinations through the careful curation of the retail offer by attracting leading fashion and lifestyle brands, from international luxury flagships to “cool” contemporary lifestyle brands, and best-in-their-field independent artisans. This is supported by ensuring the wider environment complements the premium retail offer, providing compelling and vibrant places to visit, underpinned by a wide range of outstanding restaurants, cafes and bars.

Hugh Seaborn, Chief Executive, said: “The COVID-19 pandemic and its impact on the economy and our way of life completely overshadows Cadogan’s 2019 results. However, last year’s operational performance was strong, despite the political uncertainty as a result of Brexit and a general election. Just as we were starting 2020 with a positive outlook, COVID-19 struck. Our response to COVID-19 has been focused on supporting customers quickly including providing financial support to more than 250 retail and leisure businesses. We have also worked hard to support a safe reopening with more than 85% of shops opening on 15 June and the rest shortly afterwards, with some encouraging early trading. Planning for the long-term impact of COVID-19 is equally vital. We have set up a Business Community Fund which is delivering financial help, cash flow support and other resources to our customers. Our aim is to ensure Chelsea remains an enthralling and captivating destination in the long term. This means supporting the recovery of the numerous fashion and lifestyle brands; best-in-class artisans; independents, boutiques, cafes and restaurants so that the rich tapestry of Chelsea is maintained and the area continues to thrive. This fund is also providing support to local charities so that we can help local people who need it most and thereby play our part in supporting the community during this particularly challenging time.

This strong operational performance of the business in 2019 reflects our consistent focus on quality, delivering commercial and residential space of the highest standard to the market, providing exceptional customer service, and maintaining our commitment to enhance the public realm and create great places. It is also a result of the strength of Chelsea as a captivating place in which to live, work and visit. These same characteristics will continue to serve us extremely well as we navigate a complex and challenging environment over the coming months. In this context I am confident that London will continue to be a truly international city and that Chelsea, as one of the world’s leading fashion and cultural destinations, as well as one of the best places in the world to live, is well-placed to capitalise on this.”

Sanjay Patel, Finance Director at Cadogan, said: “Our strong operational performance reflects the unique, high-quality nature of our portfolio. Equally, our commitment to active asset management and investing in the public realm is reflected both through the consistently high occupancy levels and tenant satisfaction scores among our customers. We entered 2020 with a strong balance sheet, low gearing and a positive outlook. We expect COVID-19 to have a pronounced effect on trading this year, but as a long-term owner and manager, our single focus is on the health and sustainability of the area.”

Click here to download a copy of the 2019 Annual Report


COVID-19 response – Business Community Fund

Cadogan took the approach of doing what was necessary to support occupiers and the wider community, to protect the character of Chelsea and the business for the long term, consistent with Cadogan’s values as a long term, responsible business and an important steward of the area.

Core initiatives that the Business Community Fund covers include:

  • – Initial emergency rent support measures given in the March quarter
  • – A commitment to fund rent relief for over 30 hospitality sector occupiers throughout 2020 by switching them to turnover-based leases
  • – Extended rental support of other smaller and independent retailers on a case-by-case basis
  • – Rent support for cultural attractions, hotels, gyms, beauty and wellness operators and medical uses
  • – Allowing rental payments to be made monthly in arrears for many commercial leases across the Estate until the end of the year
  • – A donation to Chelsea & Westminster Hospital’s COVID-19 Rapid Response Fund, which has supported COVID-19 research and new treatment trials, provided patients with activity packs and technology so that they can communicate with loved ones, and initiated a memory box project to help the bereaved cope with loss. The funds have also contributed to an NHS staff wellbeing programme to help frontline workers relax, refuel and re-energise before and after shifts
  • – Ongoing provision of car parking spaces and hotel accommodation at 11 Cadogan Gardens for NHS frontline workers at both Chelsea & Westminster Hospital and the Royal Brompton Hospital
  • – A number of grants made available to safeguard future creative talent in the key sectors synonymous with Chelsea including fashion, arts and crafts, music, and food. This includes the Nucleo Project, which grants free musical instruments and lessons to children in the area who wish to learn new skills
  • – A charitable donation to the Kensington + Chelsea Foundation which has – in partnership with Age UK – helped provide over 1,000 care packages each week to elderly people, while supporting numerous other charities including among BAME communities, the young and the most vulnerable in and around the area
  • – Sponsored accommodation and funding to ensure the provision of 1,500 medical gowns-per- day to local hospitals via The Fashion School. Over 32,000 gowns were delivered during the peak of the crisis
  • – A commitment to implement a dedicated destination marketing, events and tourism programme, over the next three years


Other highlights during 2019 included:

Investment & Refurbishment

  • – Cadogan took a cautious stance toward investment in 2019, with the main acquisition being Royal Avenue House, comprising well located and let retail units, extending Cadogan’s influence on King’s Road
  • – Enfranchisement sales reached £40.6m compared to £25.2m in 2018. This was significantly lower than the 10-year average of £74m but in line with expectations
  • – Cadogan’s private rented sector portfolio of over 700 units remained fully occupied in 2019 with average tenancy stays rising from 3 years to 3.69 years and new lets achieving a rental uplift of 8.5%
  • – Sloane Street public realm investment achieved final approval from the Royal Borough of Kensington and Chelsea following positive public consultations. The works will enhance pedestrian experience while having a neutral impact on vehicles and will result in one of the world’s most elegant luxury shopping streets.
  • – Fewer refurbishment projects were under construction in 2019 following a number of completions in 2018. Spending on these projects was £66.5m, down from £86.9m in 2018. Key projects included 1 Sloane Gardens, working with Parisian hotelier Jean-Louis Costes; the Belmond Cadogan Hotel, which opened in February 2019; and the largest scheme, 196/222 King’s Road, which will comprise a Curzon cinema, a Waitrose, rooftop hospitality space, flagship shops, and residential
  • – The restoration (completed in mid-2020) of the Rossetti Studios protected its original artistic heritage features. The property now offers subsidised rents to allow modern day artists to remain a key component of Chelsea
  • – The Duke of York Square Restaurant (Vardo) is a result of a public architectural competition. This design respects and complements its heritage surroundings, while representing the best in contemporary design


Retail, Leisure & Hospitality

  • – Pavilion Road opened in 2019 with an array of artisanal and independent food and drink offerings and has been a huge, first year success. During COVID-19, the area became the ‘beating heart’ of Chelsea and achieved the objective of becoming a place for the whole community, and visitors, to enjoy
  • – The King’s Road and Duke of York Square were greatly strengthened by the arrival of a number of attractive brands including Essential Antwerp, Sunspel, SoulCycle, ME+EM, Moscot and Balibaris. Further, Zadig & Voltaire upsized its King’s Road shop, creating its London flagship
  • – The food, drink and leisure offers have been increased across the Estate with the opening of Vardo on Duke of York Square, fishmonger and seafood restaurant The Sea, The Sea on Pavilion Road, beauty and wellbeing salon Urban Retreat and Soul Cycle on the King’s Road in line with the strategy
  • – A number of temporary or pop-up lettings introduced exciting, up-and-coming brands and enhanced the animation of the area, including names such as Castore, Dundas, RIXO and Cefinn
  • – The value of the regional leisure portfolio, which stood at £77m at year-end, increased by £24m during 2019, providing the business with higher income levels than are typically achievable from the Chelsea estate


Stewardship, Talent & Philanthropy

  • – More than £12m has been donated over the last five years to various charities including LandAid, Pathways to Property, the Kensington + Chelsea Foundation and the Cadogan Family Foundation
  • – Using leading independent customer experience consultant RealService, Cadogan achieved ‘good’ or ‘excellent’ ratings of 90% for customer satisfaction and 88% for responsiveness, both up marginally on 2018 results
  • – Cadogan engaged with construction partners to improve waste management practices, leading to a 98% waste recycling rate in 2019
  • – Cadogan benchmarked all large development and refurbishment sites against the ‘Considerate Constructors Scheme’
  • – Over 1,000 people in the local community were engaged for their input into Chelsea 2030, a stewardship report to be launched later this year including a number of ambitious environmental, community and social targets for the Estate, its tenants and suppliers to meet over the next decadeThe pop-up Ugly Butterfly was brought to King’s Road in collaboration with award-winning chef and restaurateur Adam Handling, Quintessentially Foundation and The Felix Project. This ground-breaking, zero-waste restaurant and sustainability hub created delicious food from ingredients which are usually discarded
  • – Cadogan reviewed all of its green spaces to promote biodiversity, changing summer planting regimes to reduce water demand and increase climate resilience
  • – Local skills and employment were supported through grants, partnerships and workshops, including the Spear Programme, which provides learning courses to vulnerable young children to help them secure the skills to acquire jobs and work experience. To date, 75% of participants have moved into sustained employment
  • – Cadogan increased its placemaking and sustainability expertise, with the appointment of a dedicated sustainability manager to oversee and implement its strategy



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Our 2019 Annual Report has been published

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