53 minute read
Strategic Report
Chief Executive’s Review
HUGH SEABORN CHIEF EXECUTIVE
The year was one of recovery after the ravages of the pandemic, and in this context the business made very good progress in 2021.
In last year’s report, I identified reasons for optimism following the dark days of 2020 due to the impressive rollout of the vaccination programme. What followed was a revival in visitor numbers to the Estate following the end of the third national lockdown in April 2021, which in turn led to a remarkable renaissance in the fortunes of many of our commercial occupiers which was reflected in rent collection performance and leasing activity. This recovery accelerated after the ending of most restrictions on ‘Freedom Day’, 19 July 2021. I am delighted that in the last weeks of March 2022, footfall on the Estate exceeded pre-pandemic levels. This reflects the strength of Chelsea as a captivating destination, supported by our pandemic strategy. Our approach has included helping the most vulnerable occupiers through a variety of rent reliefs and other concessions; maintaining high levels of occupancy; providing a wide range of marketing initiatives and events and enhancing the public and private spaces for people to enjoy. This approach was aimed at boosting local vibrancy, encouraging the return of visitors and increasing frequency and dwell time of loyal, local residents so that shops, restaurants, cultural establishments and leisure facilities all have the opportunity to flourish. Coupled to this we supported the local community, the NHS and charities at a time of great need for them.
This approach was recognised by the property industry when Cadogan was named winner of the ‘Best COVID Response’ at the 2021 Property Week Awards. I could not be more proud of this award as it recognises the enormous contribution of every single member of the Cadogan team in supporting our occupiers, suppliers, local community and the NHS through the pandemic, epitomising our central and
active role as a long term custodian of this historic, vibrant and immensely characterful part of London.
The result is that there is a renewed effervescence about Chelsea, the footpaths are bustling, restaurants are full and businesses busy. This is reflected in both commercial and residential occupancy which has returned to pre-pandemic levels. We are experiencing healthy levels of interest from a wide variety of retail and hospitality businesses for space, particularly on the King’s Road and Duke of York Square, and strong demand for rented residential accommodation. Our office portfolio remains largely fully occupied.
Consistent with our long-term business horizons and stewardship role, work is well underway to deliver the step change goals of our sustainability strategy – Chelsea 2030 – announced in 2021, including our commitment to emit Net Zero carbon by 2030. Detailed work is underway to improve the energy performance of our buildings alongside working in partnership to reduce emissions in our developments and supply chain, as we aim to achieve genuine carbon reduction over time.
Underlying this activity is a business that is increasingly positioned as a service provider, working in partnership with our occupiers to:
• Create value through strong direct customer relationships. • Deliver high levels of customer service to strengthen brand loyalty. • Forge a strategic collaborative approach to promoting and developing our destinations to drive their success. • Collect trading data to advance our understanding of retail and hospitality performance and inform estate management strategies.
At the outset of the pandemic in 2020 we established a Business Community Fund to help businesses, the local community, charities and the NHS directly. This allowed us to provide support rapidly to the most vulnerable business and residential occupiers as well as to the pressing needs of local charities. This included becoming the principal supporter of the Kensington and Chelsea Foundation, meeting their running costs and allowing their team to concentrate on identifying and responding to those in the local community with the greatest need. Amongst the response to immediate needs such as the provision of laptops to help bridge the digital divide in the Borough, we also committed to funding the three year appointment of a new case officer for the St. Giles Trust, a charity which focuses on reaching young people who are at risk or involved in Child Criminal Exploitation and serious youth violence.
The arts and culture sector was particularly severely affected by the pandemic. These uses play an especially important role in shaping the destination and contributing to the character of the area. We have continued to provide increased financial and operational support most particularly to Cadogan Hall and the Saatchi Gallery.
We have increased investment in marketing and events to promote the area and encourage consumers back; strengthened the wider neighbourhood by leading the launch of two new Business Improvement Districts (The King’s Road Partnership and The Knightsbridge Partnership); enhanced public spaces including the provision of more al fresco seating – introduced during the pandemic and which we hope will become permanent – improved landscaping, expanded the food market and introduced attractions and events. Coupled to this we have maintained occupancy levels and continued our curation of the area, introducing new and exciting retail brands often as pop-ups, which contribute to the attraction and vitality of the area.
The successful vaccination programme has allowed us to focus on the future and we all hope that COVID-19 is behind us. However, we remain aware of the risk that new variants of the virus may emerge and cause further disruption.
Above
Chelsea in Bloom September 2021
Opposite
Pavilion Road café culture
Chelsea 2030 – a sustainable future
Cadogan has been part of the Chelsea community for over three centuries and, as an owner, manager and developer of extensive property holdings, has played an active role in shaping this remarkable neighbourhood. This long-term commitment comes with the responsibility to ensure a positive contribution towards a sustainable environment, protecting the area’s unique heritage and supporting a thriving community.
Over the course of the pandemic and in the year of COP26 we have seen a significant increase in momentum to create change to deal with the climate emergency, both nationally and around the world. There has been an increase in events made more frequent by climate change, such as the storms and surface water flooding we experienced directly in Chelsea in the summer and autumn of 2021.
Last year we published our commitment to achieving Net Zero carbon emissions by 2030, alongside 11 further ambitious targets supported by a multitude of initiatives, that build on existing work to target air quality, emissions, waste, water usage, green infrastructure and support of the local community. Climate related risks and opportunities are considered as part of our strategic and financial planning approach. This year, we modelled our whole portfolio from the perspective of future Minimum Energy Efficiency Standards (“MEES”) compliance and decarbonisation, mapping out costs over the next decade. In 2022 we will build on this work, addressing decarbonisation and future MEES compliance on a blockby-block basis. Every development follows our new Design Standards, requiring both tough embodied carbon and in-use energy efficiency standards to improve building performance on a lifecycle basis.
We assess the climate risks of any property we acquire through the lens of long term ownership; considering impacts on the community together with our net zero targets and climate impacts.
Work is underway to meet the milestones set out in our strategy. Our governance arrangements for achieving these stretching goals and performance against targets are set out later in this report.
OVERVIEW OF 2021
The business has performed well in 2021 within the context of the pandemic. Total income increased by 4.8% to £168.9m (from £161.1m in 2020), just behind the pre-pandemic level of 2019 (£171.0m).
This is net of rental support, rent free periods and write-offs of previously amortised lease incentives as a result of the pandemic, amounting to £3.1m (2020 – £10.2m). Cost of sales includes provisions for doubtful debts mainly arising as a result of the pandemic, totalling £0.6m (2020 – £11.2m).
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 £97.0m to £100.8m, up 3.9%. This was 4.8% behind the 2019 level of (£105.8m).
The capital value of our property was virtually static at £4.8bn with a like for like increase of just 0.7% (£34.6m). It is notable that this follows cumulative reductions over the previous two years (2019 and 2020) which reflected a like for like decline in values of 22.6%, equating to £1.40bn.
Opposite
‘Heritage Forest’ on Pont Street
Top
Chelsea in Bloom 2021
Above
Royal Court pop-up bar on Sloane Square In 2021, we invested £43.7m in purchases and development which will produce further rental income over time. This represented a small decrease compared to 2020 and in both years we took actions to preserve liquidity in the face of the uncertain length and potential severity of the pandemic. The collection of rental income proved challenging through the pandemic. However, rental collection performance has improved in each quarter of 2021. Overall, we collected 96% of commercial rents due and 98% of residential rents reflecting the improving fortunes of our occupiers.
We are subject indirectly to significant periodic tax charges in addition to the usual UK corporate taxes. The trusts that are the ultimate owners of the business, are subject to a ten-yearly inheritance tax charge based on the capital value of the assets, the next charge becoming due in 2022. The trusts have needed over £200m of dividends since 2013 to fund the payment of this tax charge. We have a thorough strategy in place to ensure the substantial funding necessary to meet this tax charge is available and that it will continue to be so at ten year intervals in future.
Key financial highlights of 2021 are set out overleaf.
Property Portfolio
Investment Performance Highlights
Total property portfolio value of
£4.8bn
Increase of 0.7% equating to £34.6m adjusting for purchases, sales and capital expenditure
Commercial portfolio value unchanged at
£3.3bn
Retail portfolio decreased by 1.4% equating to £28.9m Office portfolio increased by 0.7% equating to £5.4m Leisure and other increased by 7.1% equating to £34.3m
Residential portfolio increased in value by
1.7%
Our principal sectors have performed differently over the pandemic, providing greater portfolio resilience.
Retail and hospitality, as consumer facing businesses, were most affected by the reduction in customer numbers and the resultant acceleration of consumer transactions moving online impacted our shops. Our experience has been that footfall and trading performance closely correlate and so the recovery of these businesses has been swift once consumers returned. This has been closely followed by improving market confidence for shop premises, with rents and lease terms strengthening.
The Chelsea office market has proved healthy and the market for space has been active with limited supply supporting pre-pandemic rental levels.
The residential letting market also proved robust, fettered only by our ability to return empty units to the market due to public health restrictions. Once these were lifted, we experienced strong demand as London returned to life.
The deeper challenges faced by retail are well documented, as are the rapid acceleration of these themes caused by the pandemic. Nationally, the changes in consumer behaviour have led to a reduction in long established retail brands, which has increased vacancy rates and challenged the level of sustainable market rents for shops.
Some retailers have resorted to Company Voluntary Arrangements (CVAs) and administrations to adjust their physical shop portfolios including discarding shops and reducing rents of those retained, at the expense of their landlords. Although unwelcome, this has advanced the necessary adjustments of the retail sector.
The business rates burden for shops, based on historical (2015) valuations, has become disproportionately onerous. This has been subject to Government review and an online sales tax is being considered. Change is urgently needed to reallocate the business rates tax burden to reflect the significant market shift that has taken place since they were last calculated. In this context, the Cadogan retail portfolio has fared well and despite the headwinds I am confident about the outlook for our shops. The factors that have contributed to this confidence include:
• A flight to quality as successful retailers understand the value of having space in the best locations, coupled to a need of fewer, better quality stores and close proximity to complementary businesses and brands – at the heart of a strong residential community.
• Retailers (including native online businesses) recognise the importance of physical space combined and integrated with their online business to enhance the customer experience, brand development and capture sales.
• Successful brands recognise the value of working in collaboration with a property provider which is positioned to deliver a service, responding to their rapidly changing needs with a consistent management strategy finely tuned to the success of the area.
Retail, our largest sector at 43.2% of the portfolio gross value, had a modest decrease in value, down 1.4% to £2.1bn (after a fall of 24.6% in 2020). The fall was due to a softening of selected retail rental values, while overall yields and rentals were largely unchanged from the previous year. Retail gross rental income decreased by 5.5% to £80.6m per annum (48.8% of the total rent roll).
Offices, which represent 15.5% of the portfolio, have proved to be more resilient with a small valuation increase of 0.7% to £743.2m after a modest decrease (-1.8%) in the previous year. The portfolio has remained largely fully occupied through the year despite a number of lease expiries. Office rental income decreased by 5.6% to £33.7m per annum (20.4% of the total rent roll).
The residential sector represents 30.5% of the portfolio. It was subject to a valuation increase of 1.7% to £1.5bn, after adjusting for purchases, sales and capital expenditure. This is the first annual increase following five years of declines which started in 2016. Gross rents for the market let portfolio increased by 12.3% from £30.1m to £33.8m. The residential rent roll fell steeply in 2020 following a higher than average number of vacates, which subsequently took longer to return to market due to social distancing requirements slowing down the rate of refurbishments. However, demand increased quickly following the end of the third lockdown in April 2021 as workers and overseas students returned to London. Adding ground rents from long leaseholds of £2.7m, residential comprised 22.1% of the gross total rent roll.
Retail
Despite the small fall in value this year, retail remains our largest sector, accounting for 43.2% by capital value and 48.8% of income.
The fall in value was localised to a small reduction in selected rental values, while overall yields and values remained stable across the portfolio. The context for the stability of retail values in 2021 is that retail values fell by 34.1% over the previous two years (2019 and 2020) reflecting the change in the way people shop and the acceleration of this theme during the pandemic.
Works to improve the Sloane Street public realm, which were delayed by the pandemic, have commenced. This will create an elegant, greener and more beautiful thoroughfare from the north of the street in Knightsbridge all the way to Sloane Square – dramatically enhancing the pedestrian experience for residents and visitors, while having a neutral impact for vehicles. New planting schemes including 90 new trees will increase the amount of greenery, contributing to the environment and our 2030 sustainability goals. This environment will further complement the extraordinary line-up of luxury retail brands that trade on Sloane Street, cementing its position as one of the best luxury shopping destinations in the world.
The challenges of the pandemic have demonstrated the attractiveness of Chelsea as a safe and exciting destination, with the area attracting consistently better footfall than other Central London areas. We benefit from proximity to the centre of London, one of the world’s foremost global cities, while being situated within an established residential area with an affluent catchment.
Lettings activity rebounded markedly as we entered the second quarter of 2021 when we secured a strong line-up of new retail lettings. Amongst these were a
RETAIL 2021 £M 2020 £M % CHANGE
GROSS VALUE
GROSS RENTS
2,077.1 2,100.8 -1.4%*
80.6 85.3 -5.5%
London first flagship store for the luxury fashion house Balenciaga on Sloane Street; the first European store for Soho Home; the innovative Anya’s Village, a collection of five stores, including a ‘village hall’ and characterful café from renowned British designer Anya Hindmarch; highly sustainable super-cool, Danish fashion brand Ganni; the internationally renowned Ralph Lauren; exciting young emerging women’s fashion brand Rixo; independent luxury handbag brand Strathberry; British independent jewellery designer Daniella Draper; French children’s wear Beeboon; independent wine shop Mother Vine; and Organic Pharmacy. Several temporary occupiers converted to longer term lettings after trading successfully, including the sports shoe retailer Copit, Italian fashion brand Pinko and ski/ beach wear retailer, Hatch.
We experienced just one retail failure in 2021 following 16 in 2020. This improvement suggests that profitable trading is available for businesses located locally as well as the effectiveness of Government pandemic support and targeted financial and other support offered to vulnerable businesses by Cadogan. The Estate was virtually fully occupied through 2021, finishing the year with a retail vacancy rate of 2.7% (eight units), exactly the same as at the start of the year. At the end of the year there were 14 temporary occupiers, a reduction of three since the start of the year. Temporary retailers – pop-ups – allow us to introduce new and emerging names and concepts as part of our wider curation of the occupier mix, contributing to vibrancy and excitement for consumers. This year, these included new brands such as fashion rental retailer – ‘more joy less waste’ – Hurr Collective, the Canadian outerwear brand Mackage, vintage-style dress brand Ghost and British clothing retailer JAM Industries.
Pavilion Road has been subject to high footfall growth following its permanent pedestrianisation by the Council after an extended trial over the pandemic, with businesses located there enjoying healthy trading. This artisan food street, now with extensive al fresco seating, provides a strong attraction and encourages longer visits as people dwell over food or a coffee while drinking in the atmosphere.
Above
Shopping on Sloane Street
Opposite, from top to bottom
London Fashion Week flags fly on the King’s Road
The Anya Village
Offices
Offices account for 15.5% of the portfolio by capital value of £743.2m. By income, offices represent 20.4% of the total and gross rents fell by 5.6% over the year, primarily due to occupiers vacating following lease expiries on Cadogan Gardens and Burnsall Street. These have since been re-let.
Our offices remained virtually fully let through 2021 and continue to be so, with a year end vacancy rate of 0.4% (nine units). There were several vacates following lease expiries but, contrary to concerns about the health of the London office market following the pandemic, these were swiftly replaced with new occupiers, who typically value the proximity to residential areas, animated environment and local lifestyle. Coupled with the limited supply of quality space, these characteristics support our market. The office sector contributes to our wider estate management by bringing an influx of workers to the area, adding activity as well as providing the business with a healthy growing income.
Activity in London is rapidly returning and it remains one of very few world capitals that offers a magnetic mix of access to talent, finance, culture and services which makes it a highly attractive location in which to live and work. We have seen little impact on our portfolio since the start of the pandemic, presenting a mix of high grade flexible space mostly in small units, at the heart of a mixed-use location.
Above
Office lifestyle in Chelsea
Right and Opposite
Striking new office development on Cadogan Gardens
OFFICES
GROSS VALUE
GROSS RENTS 2021 £M 2020 £M % CHANGE
743.2 733.4 0.7%*
33.7 35.7 -5.6%
Residential
The gross value of our residential portfolio represents 30.5% (31.4% in 2020) of the total. Residential remains our second largest sector (after retail) and is an important part of the portfolio as it diversifies performance, drives our customer service capabilities and reflects our strong stake in a thriving local community.
The reduction in the size of the residential portfolio primarily reflects disposals of non-core properties during the year representing £70.0m by book value. 2021 is the first year we have experienced a rise in value – albeit small – since 2015 and this strengthening in the market was evident just prior to the pandemic and returned in 2021 with increased transaction volumes at improving prices.
Income from residential represents 22.1% (19.5% in 2020) of the portfolio. The lower relative income yield produced by residential compared to commercial, reflects the combination of reversionary long leases which produce little income (but provide a return when the long leaseholders choose to enfranchise), and the private rented sector portfolio which generates a rental yield that is lower than commercial property.
The proceeds from enfranchisement sales during 2021 were £26.3m compared to £22.4m in 2020, remaining significantly lower than the ten-year average prior to 2019 of £74m. These sales represent the disposal of interests in 29 units (2020 – 23 units). Proceeds from 20 further discretionary sales totalled £55.9m (2020 – £16.4m) reflecting the return of a more active market from the second quarter of 2021.
In January 2021, the Government announced that it intended to review leasehold reform legislation relating to long leasehold residential property. The stated intention of simplifying this overly complex area of law is welcome. However, amongst the proposals are two areas that cause us particular concern.
• Government has announced its intent to “abolish” marriage value. If enacted, this will result in a completely inequitable one-off transfer of this significant element of value from freeholders to leaseholders. Prior to these proposals, leaseholders would have had no reasonable expectation of such a windfall. The impact for
Cadogan will be to reduce future enfranchisement proceeds. Although the financial impact over time will be significant, this future potential revenue is largely discounted in our valuations as the timing is unknown, and therefore only a small element is included within the balance sheet.
RESIDENTIAL 2021 £M 2020 £M % CHANGE
GROSS VALUE
GROSS RENTS
1,462.8 1,505.1 1.7%*
36.5 32.7 11.6%
• In addition, the Law Commission has proposed to place development and management control of mixed use buildings in the hands of residential leaseholders. The proposal is to lower the percentage of residential space required for collective enfranchisement (the compulsory purchase of a freehold) claims from 75% to 50%. This will effectively deter investment in mixed use regeneration schemes. For Cadogan, it will fetter our ability to effectively curate the
Estate and in so doing, discourage long term investment in the area.
Our hope is that Government recognises the combination of inequity and unintended consequences of these proposals and removes them from the reforms.
We also hold a private rented sector portfolio of approaching 700 houses and flats. A large number of vacates in the period following the lifting of the first lockdown, along with safety measures implemented in response to the pandemic, meant that our ability to undertake works to return vacated units to the market, was limited. Accordingly, the rental value of vacant units subject to post-occupation upgrades at the start of the year was 15.5%. We made good progress in reducing this backlog during 2021, with the vacancy rate reducing by two thirds to 5.0% by the end of the year. The increase in available units coincided with rapidly strengthening rental demand leading to properties renting as soon as they were available at higher rents against previous rents (+14% in Q4).
We have maintained our approach of delivering high quality accommodation combined with exemplary customer service, with the aim of engendering strong customer loyalty and retention over time. In 2021 the average length of stay by departing customers reduced slightly from 3.4 to 3.3 years. New lettings (most of which will have been upgraded) achieved rental uplifts on average of 3% compared to the market valuation in 2021.
The performance of our residential properties through this challenging time has demonstrated again the value of having a diversified portfolio of property uses.
Opposite and Below Right
New residential developments
Below Left
Interior styling at Soho Home
Leisure and Other
This category comprises hotels, restaurants, pubs, our growing regional portfolio established in 2018, and a variety of other properties such as schools, cultural and artistic venues, car parks and medical uses. Leisure and Other accounts for 10.8% of the value of the portfolio, up from 7.7% in 2018. The main reason for this uplift is an increase in value of the regional portfolio and hotels.
The gross value of the regional portfolio was £104.4m at the year end (£84.1m in 2020). We adopted a cautious approach and postponed purchases in mid-2019 firstly due to Brexit and political uncertainty and subsequently, the need to conserve funds in light of the uncertainty as to length and severity of the pandemic. We re-started acquisition activity in 2022.
Rental income increased by 2.1% (2020: 17.5%) due to growth in income of the regional portfolio and, to a lesser extent, new lettings on the Estate. The strategic objective of the regional portfolio is to provide higher, secure income – this was evidenced during the pandemic by 100% rent collections and no tenant failures. We intend to grow this portfolio further over the coming years as part of the strategy to help finance the ten-yearly inheritance tax liability paid by the trust settlements that ultimately own Cadogan.
The leisure sector is vital to our strategic estate management approach as these uses contribute immensely to the identity of Chelsea and the connection which residents and visitors feel for the area. For example, we own eight pubs in Chelsea. We do so because we consider them to be an important use for a compelling locality and to support the community, as elsewhere in the area many pubs have been lost to residential conversion. During 2021 The Cadogan Arms on the King’s Road reopened to strong reviews after an extensive re-fit.
Our strategic aim is to increase the extent and breadth of food and drink outlets in the area. The number of food and drink offers on the Estate has doubled over the last five years to 39 businesses, with further opportunities planned.
LEISURE AND OTHER
GROSS VALUE
GROSS RENTS 2021 £M 2020 £M % CHANGE
520.1 455.6 7.1%*
14.4 14.1 2.1%
These businesses strengthen the holistic experience for visitors and residents and improve the attraction of Chelsea. 2021 saw several new lettings to highly rated food and drink operators including Leon on the King’s Road, Ottolenghi on Pavilion Road, Meat the Fish on Cadogan Gardens and Cantinetta Antinori on Harriet Street, which is due to open in 2022 as the first London restaurant for the esteemed Antinori family, renowned for producing some of Italy’s finest wines.
Our objective of increasing investment in the hotel sector is aimed at increasing the diversification of our income coupled to the estate management advantages of enhancing local hotel provision. This strategy is not completely reflected in this report because in 2019 we demerged two operating hotels (The Cadogan Hotel and No. 11 Cadogan Gardens) to the direct ownership of the trust settlements that ultimately own the Cadogan Group. In 2021 we opened two new venues. Our newest hotel and restaurant the Beaverbrook Town House on Sloane Street opened in August 2021 to critical acclaim after an extensive construction programme. We also launched serviced apartments at 20 Cadogan Gardens after a significant refurbishment, to complement the hotel at No. 11 Cadogan Gardens.
Opposite
Cantinetta Antinori
Above
A bedroom at the Beaverbrook Town House
Below
Courtyard at the Beaverbrook Town House
Developments
We continually invest in maintenance, refurbishment and redevelopment across the Estate, to deliver consistently high quality outcomes for our customers, respond to rapidly changing markets, enhance environmental credentials and the fabric of the Estate, including maintaining its historical character. In 2021 our total expenditure on redevelopment and major refurbishments was £51.1m (£54.4m in 2020).
We maintained construction activities safely throughout the pandemic with the exception of small residential schemes which were typically in confined spaces where social distancing was challenging. This was considered important to maintain the momentum of our projects and to support the wide range of contractors who we rely on to provide outstanding results. The majority of construction expenditure in 2021 was in respect of three schemes. 115–116 SLOANE STREET which was completed mid-year with the opening of the new hotel and restaurant, the Beaverbrook Town House, in August. This highly acclaimed venue is already contributing to the appeal of Sloane Street while providing more hotel and restaurant variety in the wider area.
1 SLOANE GARDENS involves the restoration and conversion of an Edwardian apartment block into a boutique hotel and restaurant. This new hotel, opening in late 2022, will be operated on our behalf by the celebrated Parisian hotelier and restaurateur Jean Louis Costes.
196/222 KING'S ROAD is a 100,000 sq ft redevelopment of a large site which will deliver flagship shops to King’s Road, community retail on Chelsea Manor Street and affordable and market let residential apartments, a Curzon cinema, rooftop bar, public house and an enhanced Waitrose supermarket. We have managed this complex scheme carefully to enable the Waitrose supermarket to remain open despite surrounding construction, due to its importance locally.
Our development pipeline at the end of 2021 comprised 68 projects of which 22 were active. Total committed expenditure was £233m (2020: £240m) and the overall pipeline of expenditure was £489m (2020: £492m).
We are very aware that our activities can and do impact upon those around us. As well as ensuring we respond to our neighbours during construction and mitigate the disturbance where possible, we aim to be exemplary in the way in which we consult and engage locally when preparing a scheme, to understand local concerns and consider how we can respond to them. A programme of regular communication ensures that people remain fully informed. Our aim is to be the most trusted local developer and therefore to be able to adapt and respond to changing needs to ensure the area remains relevant and desirable to present and future generations of residents and visitors.
Opposite
New restaurant development, 127–128 Sloane Street
Above
The completed Beaverbrook Town House
Below
Stylish interiors at Beaverbrook Town House
Outlook
It has been a year in which we have emerged from some of the most challenging trading conditions in most people’s memory.
Despite the setbacks to the Cadogan business as a result of the effects of the pandemic – a large part of our portfolio is after all consumer facing and therefore felt the impact of closures acutely – the business is in robust health with a strong balance sheet supported by tight cost control, high liquidity and long term funding. This allows us to drive forward our well established strategies aimed at enhancing Chelsea, strengthening the business and responding to opportunities as they arise.
The resilience of Chelsea as a destination, coupled to the prompt and decisive action we took to maintain occupation levels through targeted support of existing occupiers, introducing exciting pop-ups, installing external animations such as al fresco seating, staging events and extending marketing, all contributed to maintaining the vibrancy of the area.
The recovery of our occupational markets more recently, coupled with low vacancy rates and a strong rent collection performance, provides confidence for the sustainability of our cash flow and underpins current valuation levels. There remains a risk of further variants of the virus emerging and there is greater uncertainty due to implications of the invasion of Ukraine and the socioeconomic impacts of high inflation and slowing economic growth due to labour shortages and global supply chain issues. However, I am confident that Cadogan is well placed to respond and adapt to the challenges presented.
The strong values and close and collaborative teamwork at Cadogan have proved more important than ever. I am immensely proud of the achievements of the Cadogan team. They have been willing to go the “extra mile” to provide our occupiers and suppliers with excellent service and support and they have adapted to the twists and turns of the pandemic, resulting in a complete return to Chelsea in July 2021, as well as all the preparation for recovery of the area. I would like to conclude this report by saying a very sincere thank you to all my colleagues.
HUGH SEABORN CHIEF EXECUTIVE
28 April 2022
Financial Review
SANJAY PATEL
FINANCE DIRECTOR
The increase in rental income reflects mainly a reduction in the impact of rent concessions provided to occupiers in response to COVID-19, offset by a small fall in rental income principally caused by high residential vacancies at the start of the year.
Throughout the pandemic, rent support has been provided on a case-by-case basis. Concessions have taken various forms including monthly rents, turnover rents, rent deferrals, rent-free periods and other arrangements such as concessions linked to lease re-gears, lease extensions, participation in marketing initiatives or similar.
Where rent concessions were given directly as a result of COVID-19 and certain conditions set out in the FRC’s amendment to FRS 102 in respect of COVID-19 related rent concessions were met, the concessions are recognised as a reduction to gross rental income over the period that the change in lease payments was intended to compensate. The total value of concessions recognised in 2021 as a reduction in rental income was £3.1m (2020: £10.2m).
In relation to rent deferrals or rents outstanding, the rental income is recognised as normal with the deferred rent or rent receivable balance remaining in trade debtors until settled. Where there is a credit risk over recoverability of a balance that is contractually due, any impairment is booked as a cost in Cost of Sales. An impairment charge of £0.6m (2020: £11.2m) was booked in the income statement. This represents the net impact of a release of £3.4m impairment provisions created in 2020, offset by new impairment provisions of £4.0m in 2021.
Rent collections for residential tenancies averaged 98% throughout the year, with concessions mainly involving rent deferrals or delayed rent increases. This was in line with normal collection rates.
Trading Highlights
Gross rental income increased to
£164.5m
Increase of 3.7%
Residential property disposal proceeds increased to
£82.2m
Increase of 111.9%
£100.8m
Increase of 3.9%
Profit on sale of investment properties increased to
£12.2m
Increase of 43.6%
Gain on revaluation of investment properties
£34.6m
Increase of 0.7% in capital values on a like for like basis
Profit on ordinary activities before taxation (including revaluations gains) of
£113.8m
Rent collections for commercial occupiers averaged 96% for collectable rents (net of concessions and write offs) and 89% for billed rents in the seven COVID-19 quarters starting March 2020 compared to a pre-COVID collection rate of nearly 100%. Commercial rent collections in 2021 averaged 96% for collectable rents and 92% for billed rents. Rent collections for the December 2021 quarter, the results of which will be included in the 2022 results, were 96% as at 21 April 2022.
Operating profit before capital items increased by £3.8m to £100.8m. The improvement in rental income, driven by a lower level of rent concessions, was partly offset by increased property and administration expenses as we caught up on maintenance, developments and the backlog of refreshes on residential short let properties vacated at the start of the pandemic.
The profit from the sale of investment properties in 2021, which includes profits from leasehold enfranchisements, contributed £12.2m compared to £8.5m in 2020. There was a higher number of transactions completed at 49 compared to 32 in 2020.
The consolidated income statement reflects the movement on the annual revaluation of the investment property portfolio. All portfolio categories, apart from retail, increased in value during the year resulting in a net revaluation gain of £34.6m (2020: loss of £795.2m).
The charge for current taxation in the year was £18.9m, an increase of £6.0m compared to 2020 and higher than the increase in operating profit, mainly because of an increase in profit from the sale of investment properties and a lower interest expense. The overall figure for taxation in the income statement for 2021 was a charge of £228.7m (2020: credit of £52.4m), due mainly to a deferred tax charge recognising an enacted future increase in the corporation tax rate from 19% to 25% in April 2023. The credit last year arose mainly as a result of the revaluation loss in 2020.
The dividend paid to shareholders in December 2021 was £34.1m. This was paid mainly to provide funds to the major shareholder so it can meet an upcoming ten-yearly inheritance tax charge due in 2022, and to a charitable trust to enable it to meet its charitable commitments.
Cadogan is mindful of its tax obligations and is liable for, and collects on behalf of HMRC, various taxes in its operations. The table below shows the tax paid by Cadogan and that collected and remitted to HMRC by Cadogan. As in previous years, the tax collected is significantly greater than the direct tax charge shown in our accounts, demonstrating our wider contribution to the UK economy.
In addition to the tax set out in the table, Cadogan Group’s dividends flow through to several family trusts and are (save in the case of a charitable trust) subject to income tax. Furthermore, a substantial proportion of the dividend is used to provide for the ten-yearly charge to inheritance tax in relation to certain of the trust assets. In the case of the principal trust the next ten-yearly charge, due in 2022, is currently estimated at in excess of £135m before allowing for the tax charge on extracting the funds. We calculate that total dividends required by the family trusts from Cadogan to pay the inheritance tax charge due in 2022 amount to £205m.
TOTAL UK TAX CONTRIBUTION 2021 £M
2020 £M
Tax paid by Cadogan
UK Corporation Tax
SDLT 17.2 16.0
- 0.1
Employer’s National Insurance 1.0 1.0
Non-domestic rates and Council Tax 2.3 2.2
Irrecoverable VAT
Other 4.1 3.5
0.5 0.3
25.1 23.1
Tax collected and paid over by Cadogan
PAYE and Employees’ National Insurance
VAT
TOTAL
2.8 2.6
11.7 20.6
14.5 23.2
£39.6 £46.3
Balance Sheet and Borrowings
The value of our properties at the end of 2021 was £4.804bn, a small increase on the previous year’s figure of £4.796bn. On a like for like basis this reflected an increase in value of 0.7% compared to a fall in 2020 of 14.2%. Despite this, Group shareholders’ funds reduced from £3.40bn to £3.26bn as a result of a deferred tax charge for a prospective increase in the rate of corporation tax. Net assets per share fell to £27.14 from £28.33, a decrease of 4.2%.
Cash flows from the Group’s property operations were lower than last year because of a £51m short term loan advanced to the parent company Cadogan Settled Estates Holdings Limited to enable the latter to make a capital distribution to the trust settlements that own the Group to fund the 2022 inheritance tax liability. The loan was repaid in April 2022. Cash flows from property operations were higher than 2020 after excluding the loan, mainly due to increased rent collections.
Year end borrowings, excluding overdraft of £2.4m (2020 – cash balance of £11.5m) decreased during 2021 from
£811.5m to £806.8m. During the year we received £55m in July from the third and final drawdown of a private placement completed in 2018; and £50m from the second and final drawdown on the £100m private placement completed in September 2020. The revolving credit facility was £35m drawn at the year end, a decrease of £55m compared to 31 December 2020. There were loan repayments in the year totalling £49m, comprising £45m in March in respect of maturing loan notes from the 2011 private placement and £4m on another loan. There was a reduction of £5.7m in 2021 after translating our dollar denominated borrowings at the year end exchange rate and recognising the fair value of the related cross currency swaps. At 31 December 2021 the average maturity of our debt was 12.28 years (2020: 10.57 years) and the average effective rate of interest across all loans reduced from 4.72% in 2020 to 4.44%. Apart from the revolving credit facilities, all our debt is at fixed rates.
There was an increase in year end balance sheet gearing to 24.9% from 23.5%. Gearing as measured under our loan covenants, increased by 0.1% to 20.5%, while interest cover increased to 3.4 times from 2.8 times, comfortably in excess of our financial covenants. At the year end we had total undrawn facilities available to the Group of £265m under revolving credit facility arrangements.
On 7 April 2022 we extended our revolving credit facilities, amounting to £300m in total, on unchanged terms, by one year to 3 April 2024.
In December 2021 and January 2022, we rate locked £300m of long term funding from three private placement deferred loans, taking advantage of low interest rates in anticipation of projected funding requirements over the next 5 years. £100m is deferred to December 2022, £50m to September 2024, £50m to March 2025, £50m to September 2025 and £50m to September 2026. The initial tranche of £100m matures in 2043 and the remaining tranches have maturities in 2060 and 2062.
Impact assessment of COVID-19
We have undertaken a stress test with a severe but plausible downside COVID-19 scenario of a further lockdown in Autumn 2022 similar to the first one in March 2020, due to the emergence of a new, virulent strain of COVID-19, to assess the potential impact on headroom for liquidity and loan covenant compliance, taking account of mitigations available. Details of the stress test are provided in the Going Concern section of the Directors’ Report on pages 70 to 71 and the conclusion is that, in the severe but plausible downside scenario modelled, we would have sufficient liquidity and satisfy all our loan covenants in 2022 and 2023.
Approach to Risk Management
Cadogan has a well-developed strategy and process for risk management. Overall responsibility for risk management lies with the Group board, which is responsible for determining the Group’s risk appetite and ensuring that the Group’s risk management system properly identifies, understands and manages all relevant risks.
The Group’s risk appetite and processes for managing risk are regularly reviewed by the board. The Finance Director, supported by the senior management team, is responsible for compiling the Risk Register which is updated on a regular basis. The Risk Register identifies the principal risks impacting on the business and the Group’s financial position. It provides an assessment of the likelihood of the identified risks materialising and includes an estimate of the potential impact of each area of risk on the business. The Register is formally reviewed by the board at least annually and this forms an important part of the overall risk management process. The Group also makes use of appropriate external specialists to advise on compliance with established policies and external regulations.
Cadogan is a long-term property investor with a clear focus on high quality property assets located in central London. Because of its private ownership and long-term outlook, the Group aims for, and is able to achieve, a high level of resilience in all areas of the business.
Cadogan assesses risk under three principal headings:
- Strategic risk - Financial risk - Operational risk
The impact of COVID-19 cuts across all three risk headings that we consider. A summary of the impact of COVID-19 on the business, steps taken and outlook is included in the Chief Executive’s review on pages 10 to 11 and the results of stress tests on liquidity and borrowing covenants are summarised in the Financial Review on this page and Directors’ Report on pages 70 to 71 (Going Concern).
At the start of the pandemic our Operations Group, led by the Chief Executive and comprised of senior management responsible for operational activity, met at least twice a week to discuss COVID-19 related issues and agree decisions and actions quickly. The frequency was reduced to weekly meetings during the course of 2021 as conditions started improving. The Board receives regular updates and has held additional meetings when necessary.
STRATEGIC RISKS
Property market risks – the risks arising from property cycles and from shorter-term unexpected changes in the market for property investment, development and occupation. Retail is subject to structural changes, such as the ongoing shift to online transactions, accelerated by COVID-19, which increases the risks to retail property owners and which our close estate management strategy responds to. The move to more flexible working caused by COVID-19 has made the long-term demand for office space less certain, though Cadogan has not experienced a reduction in demand to date. COVID-19 could have a
short- and long-term impact on occupational demand for different uses. Cadogan has been preparing for many years for the shift of retail sales to online by having a diversified asset portfolio, positioning its Estate towards luxury and distinctive retail propositions, increasing non-retail leisure and food and beverage options to increase attractiveness and increase dwell time in the area, and minimising vacant units with short-term lets to on-trend retail and hospitality occupiers. Cadogan has led on the establishment of Business Improvement Districts (BIDs) on the King’s Road and Brompton Road in 2021. These will help promote these areas, enhancing their vitality and attractiveness.
Most property markets are cyclical, and this is particularly true of central London. As a long-term investor the Group is less reliant than others on predicting property market cycles and aims to manage the impact of the property cycle and any other short-term fluctuations in values or activity levels by ensuring a relatively high proportion of committed long-term loan finance, planning for significant headroom against external financial covenants and high levels of available liquidity. These factors also assist the Group in managing cash flow and liquidity risks.
Geographic concentration – the Group accepts the risks inherent in the small geographic area in which the Group’s properties are concentrated. The Group’s properties are primarily located in Kensington and Chelsea which for many years has been an area renowned for long-term prosperity and economic resilience. The Group also seeks to balance this geographic concentration through a diversified portfolio of uses and through close attention to the balance between sectors. The largest individual property represents 4.7% of the total portfolio value and the highest individual rent 3.9% of total annual rental income.
COVID-19 has reduced visitors to central London, impacting retail trade. Cadogan has carefully curated its Estate over many years to create a vibrant local neighbourhood where spending is dominated by its residents and less reliant on visitor footfall. This was evidenced by the comparatively smaller reduction in footfall during the pandemic than other central London areas.
The Group monitors and is actively involved in consultation with the Royal Borough of Kensington and Chelsea where it considers that it could be affected by changes or developments to local planning policies. The Group is committed to close liaison with stakeholders and the community to ensure that its strategy and developments are understood externally. In addition, there are statutory and regulatory risks which are closely monitored.
Development risks – Cadogan regularly undertakes substantial development projects, but carefully considers the timing to ensure that the Group's exposure to development risk is controlled, both relative to the overall portfolio and to potentially competing schemes in the same area. Cadogan consults widely on development schemes to ensure that schemes are designed to the highest quality and to assist in obtaining the most appropriate planning consent.
COVID-19 has had a number of adverse effects on development activity. Some development projects have been delayed to preserve financing headroom in the face of uncertainty as to the length and severity of the pandemic. Compliance with social distancing guidelines means fewer workers allowed on some sites, affecting productivity. Materials shortages have led to delays and increased inflation in input costs, which may lead to cost overruns on some projects. There is a need to incorporate additional flexibility in future development projects to allow a wider range of end uses following recent changes in planning use guidelines and changing market demand over time. Movement of international labour caused by travel restrictions has impacted some projects relying on specialist skills from other countries. The impact on development projects may be felt for many years through changes in the supply chain, inflation and loss of expertise in key suppliers and contractors.
Risks associated with London's position as a global capital – London’s position as a global capital has been a significant factor in the overall prosperity of central London in recent years. There are risks to this position from several factors, most significantly from Brexit, from terrorism, from under-investment in infrastructure and from adverse changes to the tax regime, particularly affecting overseas investors. The Group cannot manage or control these risks but Cadogan takes an active role in lobbying through organisations such as London First and the British Property Federation, amongst others, to ensure that the longterm health of London is at the forefront of the minds of national and local government.
COVID-19 has reduced the number of international visitors to the UK which has adversely impacted retail on the Estate in the short-term. This has been exacerbated by the withdrawal of tax-free shopping by the Government, making the UK the only major European country that does not have a practical tax-free shopping scheme for overseas tourists. Inbound tourism showed a brief rebound during 2021 before the emergence of the Omicron strain of COVID-19 but is expected to resume now that most travel restrictions to the UK have been lifted and other countries follow. Cadogan is working closely with its retailers on enhanced marketing strategies for attracting more UK and international visitors to the area in 2022 and beyond.
FINANCIAL RISKS
Interest rate risk – The majority of long-term borrowings are at fixed rates of interest, achieved either by agreement with the lender, or through the interest rate derivatives market. The board requires at least 75% of long-term debt to be subject to fixed rates of interest. The Group does not undertake financial instrument transactions that are speculative or unrelated to trading activities. Board approval is required for the use of any new financial instrument. In December 2021 and January 2022,
the Group took advantage of low prevailing interest rates to raise £300m of fixed rate long term deferred borrowing which will be drawn in tranches in 2022, 2024, 2025 and 2026.
Inflation risk – The reopening of the world economy during 2021 has led to widespread shortages of labour, raw materials and energy leading to higher inflation. This has been exacerbated by the war in Ukraine. Central banks’ view before the war was that inflation would come down to target levels by the end of 2022, but the war in Ukraine could mean that high inflation persists for longer and increases the risk of stagflation (low growth, high inflation). High inflation often leads to higher interest rates, affecting our cost of debt and the economic outcome of investment decisions, impacting our investment strategy. Persistent inflation could also lead to increased operational costs. Rents on most of Cadogan’s commercial and residential leases are linked to RPI, mitigating against cost inflation. Construction costs on development projects can be locked at the outset through fixed price contracts, but in a high inflation environment it could lead to higher construction costs for new projects and projects where the costs have not been fixed as contractors seek to mitigate their risk. High inflation can help retailer profitability where they are able to pass on costs through higher pricing, providing retail tenants with a hedge against higher rents.
Refinancing risk – The Group seeks to manage refinancing risk using a spread of loan maturities. In normal circumstances, loan terms, other than bank loans, are for an initial period of ten years or more. The incidence of maturities is spread to ensure that major refinancing is spaced out over time.
Foreign currencies – Some of the private placings of debt which the Group has undertaken have included a significant proportion of US dollar borrowings. All exposure to US dollars in relation to both interest and capital repayments has been swapped into sterling on the date on which the loans were committed, and as a result there is no residual foreign exchange risk exposure to the Group. Operationally the Group has no foreign currency exposure.
Compliance with financial covenants – The Group has provided financial covenants to its lenders to support its unsecured borrowings. The Group’s financial position is regularly monitored against the covenant requirements to ensure that the Group has significant financial headroom and is not at risk of breaching any of the covenants. Scenario planning is used to assess the sensitivity of potential changes to the principal financial measures which might impact the ability to meet covenant requirements.
Customer creditworthiness – Prior to COVID-19, Cadogan had high rent collection rates and few occupier defaults or failures. COVID-19 resulted in a sharp fall in rent collection rates and an increase in defaults. Cadogan responded quickly through a number of initiatives. It identified a list of the smaller and most financially vulnerable businesses and offered various financial support packages including deferrals, waivers, turnover only rents and monthly in arrears payments, the purpose being to enable them to survive the crisis and remain operational afterwards. The frequency of credit control meetings was increased from 8 to 12 times a year, and additional resource was recruited to liaise with customers to help assess and deal with their requests. These actions have resulted in minimising commercial vacancies and defaults and increased rent collection rates from the low level experienced at the start of the crisis. In recent months, collection levels have returned closer to pre-pandemic levels.
OPERATIONAL RISKS
Property loss and damage – All the Group’s properties are insured against loss or damage on a full reinstatement basis, including three years’ loss of rental income. Cover includes terrorism risk which is provided by a major insurer and member of Pool Re. COVID-19 illustrated the limitations of insurance cover and highlights the importance of maintaining a strong financial position and liquidity headroom to enable the business to withstand uninsurable or unknown future events.
Health and safety risks – The Group accords a high priority to health and safety issues. Health and safety issues are always discussed at the monthly Property Management Committee meeting and all incidents are reported and reviewed on a monthly basis. From time to time the Group undertakes external reviews and audits of its health and safety policies and procedures, the results of which have confirmed the quality and integrity of health and safety practices. An online health and safety system has been implemented in 2021 to enhance compliance monitoring.
COVID-19 resulted in most employees working from home in the first quarter of 2021, though staff have returned to full time working in the office since then, apart from a short period at the end of the year with the emergence of the Omicron variant, to help support activity and occupiers on the Estate. The Group’s offices, as well as tenanted buildings, which it manages have been COVIDsecure throughout the pandemic. Risk assessments were performed for all employees to ensure they could travel to the office and work safely in accordance with government guidelines. Managers consult with employees regularly to monitor their physical and mental wellbeing. Mental health awareness training has been provided for staff as well as access to confidential helplines with trained professionals.
Climate change – Climate-related risks are considered to be principal risks and their management is integrated with the overall risk management strategy.
There are four climate specific risks identified:
- Medium-term impact of climate change on our property and business, including the risk of damage caused by river or surface water flooding and the risk caused by rising
temperatures and extreme weather events. The Group works closely with its principal insurer and external experts to support physical and transition climate risk assessments and strategies to implement mitigations.
- Short-term changes in environmental and climate regulation including increasing building energy efficiency and reporting requirements. Changes in legislation are monitored internally, by trade bodies of which Cadogan is a member and our legal advisers, and suitable changes made where necessary.
- Medium-term, increasing energy and carbon pricing. Improved energy usage monitoring and management is intended to reduce consumption over time, alongside efficient equipment and renewable generation. Our energy prices were fixed under a three year contract which expires in October 2023. We fill face potentially higher energy costs following that date if current high energy prices persist. Our carbon offset hedging strategy will explore the potential for pre-purchasing offsets to reduce exposure to extreme price increases in the latter half of this decade.
- Loss of social licence to operate if we are perceived not to be acting in the wider interests of the area and the country. We actively engage with the local council, the Royal Borough of Kensington and Chelsea (“RBKC”) and stakeholders in the community.
Cadogan publicly announced its new sustainability strategy, Chelsea 2030, in 2021 following its approval by the board in December 2020. Chelsea 2030 seeks to address and mitigate all the above risks.
In 2021 we conducted a climate risk review in line with the TCFD recommendations:
- We worked with our insurers Zurich to understand the physical risks climate change poses to our Estate, taking a building-by-building approach to modelled global risks through qualitative and quantitative scenario analysis using climate data from Jupiter Intelligence’s Climate Score Global v2.3.
- We considered risk in the short term until 2030, and medium term up to 2050, with long term information to 2100 provided for context. Our analysis focused on two distinct climate scenarios (called “Shared Socio-economic Pathways” or “SSPs”) used by the Intergovernmental Panel on Climate Change (IPCC): a scenario where global average temperature increases by under 2 degrees by the end of the century (SSP 1-2.6), and a scenario where temperatures increase by over 4 degrees by 2100 (SSP 5-8.5). Following international pledges made at COP 26 in Glasgow, we look to be on track for a climate scenario between these two.
- The scenario analysis assessed the change over time of perils including fluvial flood, precipitation, wind, hail, thunderstorm, drought, heat and wildfire. These perils were considered in the context of building vulnerabilities, including building height, presence of basements, tenant type and building structure. Together, risk was quantified by impact on building value and rental income.
- An increase in precipitation severity of approximately 6% is modelled between the baseline period and 2020-2030, and a more marked increase of 11–14% is projected by 2050 for both scenarios. These extreme precipitation events would see more than an average historical month’s total rain falling in 24 hours, potentially resulting in surface flooding, due to the capacity of drainage systems being exceeded.
- A small differentiation between properties regarding river flooding is observed due to terrain effects, with two properties showing a significant increase in flood risk by end of century. Properties with basements are generally more vulnerable to river and precipitation flooding, and account for over 40% of the total building value and annual rent on the Estate.
- The occurrence of severe drought conditions that impact soil moisture and reservoir storage is projected to increase by 2050 in both scenarios. Impacts of reduced soil moisture include subsidence, which affects buildings differently due to their age and type of foundations, potentially causing cracking and damage to pipes including water and gas. Other impacts of drought are felt through water availability.
- From the near-term out to the end of the century, heating is likely to remain an important requirement, although the number of hot days is also likely to increase over the century in both climate change scenarios. This is important to feed into the decarbonisation plan for the estate as heating is electrified and insulation protection provided against both extreme heat and cold.
- We are using the findings of the climate risk assessment to develop our understanding of, and scoping of specific adaptation projects. Over the coming year we will also carry out a review of transition risks and opportunities posed to Cadogan under different climate and enviroeconomic scenarios.
IT, telecommunications and business continuity risks – The Group ensures its IT and telecommunications systems are robust and fit for purpose, with an emphasis on the development of inherent resilience and backup capability. The Group has a detailed business continuity plan which is regularly reviewed and updated. The Group undertakes regular external cyber security reviews and implements any resulting recommendations for security improvements. Staff are regularly reminded of e-mail and IT security threats. Compliance with General Data Protection Regulations (“GDPR”) is embedded within the organisation, with GDPR Champions appointed for each team who undergo training every 6 months. As a result of its operational preparedness, Cadogan staff were able to transition seamlessly to working from home from the start of the first lockdown and IT systems have worked without any major downtime throughout the pandemic.
