TIDMSHB
RNS Number : 6142R
Shaftesbury PLC
25 September 2017
Shaftesbury PLC
Finance and trading update
For the period 1 April 2017 to 22 September 2017
Finance
We have concluded important initiatives during the period to
strengthen further the Group's financing arrangements, taking
advantage of the current interest rate environment and lenders'
appetite to provide secure long-term finance.
As previously reported, earlier this month we issued GBP290
million first mortgage bonds due 30 September 2027 with a coupon of
2.348%. The proceeds were used to repay bank facilities totalling
GBP75 million and reduce drawings against our revolving credit
facilities, with the balance being retained as cash. This
significantly increased our financial resources whilst further
diversifying our sources of finance; bonds now represent 45% of our
debt funding with the remainder provided by term loans (34%) and
bank facilities (21%).
Following the recent increase in forward interest rates, we have
taken the opportunity to cancel our remaining GBP125 million of
legacy interest rate swaps at a cost of GBP57.9 million, equivalent
to a reduction in EPRA NAV of 21 pence per share.
Following this refinancing activity, we now have circa. GBP305
million of resources available to invest further in our portfolio.
Our blended cost of debt has reduced, on a pro-forma basis, by 40
basis points to 3.3%. The marginal cost of future borrowing is 1.1%
so, on a fully drawn basis, our weighted average cost of debt would
fall to 2.8%.
Trading
London's West End's prosperity is underpinned by a unique
combination of its appeal to Londoners and domestic and
international visitors, as well as its diverse business community,
which brings a large local working population.
The West End has been busy throughout the summer, with a notable
increase in overseas visitors, who are benefiting from the weakness
in Sterling. Although national consumer spending trends are
unclear, trading in our locations continues to be buoyant.
Leasing activity
Demand for the smaller accommodation we traditionally offer is
good. Lettings, lease renewals and rent reviews are being concluded
on terms in line with our expectations, and vacancy levels remain
low.
As we have previously noted, larger space requires occupiers to
commit to significant investment in fit-out and substantial rental
commitments and we have always expected letting periods to be
longer for than for smaller space. Current political and
macro-economic uncertainties are now showing signs of slowing
occupiers' decision-making processes. Whilst we continue to see a
broad range of interest in our larger space, the time taken to
conclude larger lettings is increasing but we will be patient in
selecting occupiers that meet our long-term objectives.
Major schemes
-- Thomas Neal's Warehouse, Seven Dials
Marketing of this flagship space continues, and we are confident
we will secure a trading concept consistent with our aspirations
and compatible with particular local planning and licensing
constraints.
-- Central Cross, Chinatown
Our scheme completed at the end of May 2017, and is now being
marketed. We are well advanced in agreeing terms on two of the
three restaurants, and three of the four smaller cafés are either
let or under offer. The retail units fronting Charing Cross Road
have attracted considerable interest, which we are currently
evaluating.
Westminster City Council's scheme to create a new public square
in Newport Place and improvements to Newport Court, which we are
funding, will commence in October 2017.
-- 57 Broadwick Street, Carnaby
The contractor will shortly be handing over the retail and
restaurant units, both of which are already under offer. Marketing
of the office accommodation has recently commenced and we expect
handover early in 2018.
Acquisitions
In the period since 1 April 2017, we acquired two restaurants,
at a total cost of GBP9.0 million, bringing total purchases for the
financial year to GBP37.1 million. The availability of properties
to buy in our locations, and which meet our strict criteria,
continues to be limited.
As reported in August 2017, we have entered in to a contract to
forward purchase a long leasehold interest in 90-104 Berwick
Street, Soho at a price of GBP38.5 million.
Located at the southern end of Berwick Street, the property is
being redeveloped to provide 12,500 sq. ft. of retail, a 5,500 sq.
ft. supermarket, a 2,000 sq. ft. restaurant and a 110-bedroom
hotel. Both the hotel and supermarket have been pre-let. The
redevelopment is expected to complete in late 2018, which will,
subject to satisfying various contractual conditions, trigger the
completion of the acquisition.
Disposals
Disposals of non-core assets since 1 April 2017 comprised a
small mixed use building in Covent Garden and five apartments.
These sales totalled GBP7.6 million, 8.9% above book value at 31
March 2017.
25 September 2017
For further information:
Shaftesbury PLC 020 7333 RMS Partners 020 3735 6551
8118 Simon Courtenay
Brian Bickell, Chief Executive MHP Communications 020
Chris Ward, Finance Director 3128 8100
Reg Hoare/Gina Bell
This announcement includes inside information
About Shaftesbury
Shaftesbury PLC is a Real Estate Investment Trust, which owns an
exceptional 14 1/2 acre portfolio in the heart of London's West End
- a highly popular, sought-after and prosperous destination for
visitors and businesses. Our holdings are concentrated in Carnaby,
Covent Garden, Chinatown, Soho and Charlotte Street.
Our objective is to deliver long-term outperformance in growth
in rental income, capital values and shareholder returns.
We focus on retail, restaurants and leisure in the liveliest
parts of the West End. At 31 March 2017 our portfolio comprised 282
restaurants, cafés and pubs and 301 shops, together extending to
1.1 million sq. ft., and accounting for 70% of our current income.
In our locations, these uses have a long record of occupier demand
exceeding their availability. The portfolio also includes 405,000
sq. ft. of offices and 570 apartments for rent, which provide 17%
and 13%, respectively, of our current income.
In addition, we have a 50% interest in the Longmartin joint
venture with The Mercers' Company, which has a long leasehold
interest in St Martin's Courtyard in Covent Garden. Extending to
1.9 acres, it includes 21 shops, ten restaurants and cafés, 102,000
sq. ft. of offices and 75 apartments.
Forward-looking statements
This document may contain certain 'forward-looking' statements.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Actual outcomes and results may differ materially from any outcomes
or results expressed or implied by such forward-looking
statements.
Any forward-looking statements made by, or on behalf of,
Shaftesbury PLC speak only as of the date they are made and no
representation or warranty is given in relation to them, including
as to their completeness or accuracy or the basis on which they
were prepared. Shaftesbury PLC does not undertake to update
forward-looking statements to reflect any changes in its
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
Information contained in this document relating to Shaftesbury
PLC or its share price, or the yield on its shares, should not be
relied upon as an indicator of future performance.
Ends
This information is provided by RNS
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