Shaftesbury Capital had an “excellent start” as a newly merged company in the six months to June 30, creating the leading central London mixed-use REIT with a strong pipeline of demand for the second half, CEO Ian Hawksworth said yesterday.
In March the central London landlords Shaftesbury and Capital & Counties merged, uniting much of London’s Soho and Covent Garden precincts under a single ownership. On the JSE, Shaftesbury’s share price gained 3.17% to R28.29 yesterday afternoon.
“Despite economic uncertainties, strong leasing pipeline and positive trading conditions across our West End locations, provide us with confidence in the growth prospects for our unique portfolio,” he said.
There had been strong performance with growth in annualised rent and ERV (estimated rental value) and despite a challenging macroeconomic backdrop, valuations were unchanged.
“Trading conditions across our West End locations are positive, with high footfall and customer sales now tracking 15% ahead of 2019 levels. Two hundred and twenty leasing transactions completed in the first half of the year, at rents on average 5% ahead of December 2022 ERV, providing confidence in the prospect of continued rental growth from our unique portfolio,” he said. Vacancy was low.
He said benefits of the combined platform were already apparent and with a strong balance sheet, the group looked forward “with confidence on delivering further growth and returns in the years ahead.”
An interim dividend of 1.5 pence per share was declared.
There had been positive trading activity for the group’s customers, with reported sales in aggregate 15% above 2019. High footfall across the West End had been buoyed by increasing international visitor numbers. Twenty-seven new retail and hospitality brands and concepts were introduced across the portfolio.
Annualised gross income was up 5.% to £188 million (R4.5 billion), now ahead of pre-pandemic levels (pro forma 2019: £187m).
Liquidity of £457m comprised £157m cash and £300m undrawn facilities. Capital commitments were modest at £23m.
Schemes with an ERV of £6.9m were completed of which £5.5m was let or under offer. ERV of space under refurbishment at 30 June was £15.7m (6.7% of portfolio ERV)
The valuation of wholly owned portfolio was unchanged at £4.9bn in line with pro forma December 2022 £4.9bn.
There had been good progress on integration with cost savings ahead of schedule and overall savings anticipated to be £13.5m.
“Despite macroeconomic uncertainty, the heart of the West End remains attractive with competition for space in our areas anticipated to remain healthy, underpinning rental growth prospects,” said Hawksworth.
Underlying earnings of £27.5m were equivalent to 1.9 pence per share.
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