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Shaftesbury returns to pre-COVID performance metrics

Capco eyes takeover of Shaftesbury

Shaftesbury, which owns a 16.4-acre portfolio in the heart of London’s West End, has reported results for the year ended 30 September 2022 that show all performance metrics have returned to pre-COVID levels.

It said that the West End economy had seen a “rapid rebound” in activity, with footfall and spending ahead of 2019 levels. It added that its retail and hospitality occupiers were both reporting average monthly sales 6% ahead of pre-pandemic levels.

Strong demand for space across all uses has led to a return to pre-COVID occupancy levels across its portfolio (4.0%, of which 1.6% was under offer) and growth in rental values. It completed 59 new hospitality and retail lettings during the year.

Net property income was up 28.0% to £82.8m (2021: £64.7m), with a 38.2% increase in invoiced rent to £113.3m (2021: £82.0m) reflecting improved occupancy and the ending of occupier rental support. Rental income, after adjustments for lease incentives, was £110.4m (2021: £105.0m) – a 5% like-for-like uplift.

Rent collection was also back to pre-pandemic levels of 99%. Underlying EPRA earnings per share was 9.9p (2021: -2.0p), fully covering its dividends for the year of 9.9p, which were up 54.7% year-on-year.

EPRA net tangible assets (NTA) was up 3.6% in the year to £6.41 per share (2021: £6.19) predominantly due to net revaluation gains in its portfolio of 3.6% to £3.2bn. The softening of property investment yields in the second half of the year (caused by higher interest rates) saw the value of its portfolio fall 3.6% in six months, compared to a gain of 7.5% in the first half.

Valuation increases were across all sectors, with hospitality and leisure up 4.5%, retail up 0.9%, offices up 3.6% and residential up 5.7%. The portfolio’s estimated rental value (ERV) was up 9.0% to £145.8m (2021: £131.7m), giving the portfolio rent a reversionary potential of £29.9m.


The company has a loan to value (LTV) of 25.2% and a weighted average maturity of 7.7 years (the earliest maturity is £290m mortgage bonds in 2027). The blended cost of debt was 3.1%. The group has available resources of £155.2m. Valuation could fall 49% before it breaches its debt covenants, while net income decrease would need to fall 68% to breach its interest cover ratio covenant.

Proposed merger update

The proposed merger between Shaftesbury and Capital & Counties has been approved by shareholders of both companies and is awaiting approval from the CMA. It is now expected to become effective during the first quarter of 2023.

Brian Bickell, Chief Executive, commented:

“The year has seen a rapid rebound in the West End economy as Covid-related disruption receded and patterns of everyday activity returned to pre-pandemic normality. The sustained recovery in footfall and trading since the early months of 2022 has been matched by the strength of occupier demand in our carefully curated and popular locations.

“Although London and the West End cannot be immune from the unprecedented range of challenges which are now dominating the national outlook, their long-term prospects remain bright, thanks to their enduring appeal to global, domestic and local visitors, businesses and investors, their dynamic economies and ability to attract talent and creativity from across the world. These features are mirrored in the locations in which we invest and, together with our proven, innovative management strategy and our experienced and enthusiastic team, reinforce our confidence in the long-term potential of our exceptional portfolio.”

SHB : Shaftesbury returns to pre-COVID performance metrics

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