TIDMSHB
RNS Number : 4301P
Shaftesbury PLC
08 February 2019
Shaftesbury PLC
Trading and finance update
Shaftesbury PLC, the Real Estate Investment Trust that owns a 15
acre portfolio in the heart of London's West End, today announces a
trading and finance update for the period 1 October 2018 to 7
February 2019. The announcement is being issued prior to the
Company's Annual General Meeting, which is being held later
today.
Highlights
* Robust footfall and trading over the festive period.
* Resilient demand for our regular space; occupancy
remains high.
* Good leasing activity: lettings, renewals and rent
reviews with a rental value of GBP9.3m concluded
since 1(st) October 2018, at or above 30 September
2018 ERV.
* Progress with our larger schemes:
* Thomas Neal's Warehouse - let.
* Central Cross - 71% let or under offer. Just three
shops remain available.
* 72 Broadwick Street - planning application submitted.
* Value-enhancing schemes extending to 165,000 sq. ft.
underway.
-------------------------------------------------------------------------
Brian Bickell, Chief Executive, commented:
"During the important trading season leading up to and including
the Christmas and the New Year holidays, footfall in our locations
has been robust and our occupiers generally reported growth in
turnover compared with the same period in 2017. In contrast to
reports of subdued leisure spending nationally, our restaurants,
cafes, pubs and bars were particularly busy throughout the festive
period."
8 February 2019
For further information:
Shaftesbury PLC 020 7333 8118 RMS Partners 020 3735 6551
Brian Bickell, Chief Executive Simon Courtenay
Chris Ward, Finance Director
MHP Communications 020 3128 8100
Oliver Hughes/Reg Hoare
Shaftesbury PLC LEI: 213800N7LHKFNTDKAT98
Overview
London, the largest city in Europe, has a global reputation and
appeal which underpins its dynamic, broad-based economy and
long-term prospects. Its many unique features provide a
considerable degree of insulation from the impact of UK political
uncertainties, particularly relating to Brexit, which are
continuing to adversely affect both business and consumer
confidence nationally.
Our 15 acre portfolio, comprising c.600 buildings, is located in
the heart of the West End. Its 1.1 million sq. ft. of restaurant,
leisure and retail space provides some 68% of our rental income.
With an exceptionally large and diverse catchment of nearly nine
million Londoners, a huge local working population and unrivalled
numbers of domestic and international visitors, the West End offers
a busy, seven-days-a-week trading environment and access to a
relatively affluent customer base. This demographic is unmatched by
any other UK location. Together with the long-term curation of our
lively, iconic destinations, this provides occupiers with the stage
set for prosperous trading and drives sustained demand for all uses
across our portfolio.
Trading
During the important trading season leading up to and including
the Christmas and the New Year holidays, footfall in our locations
has been robust and our occupiers generally reported growth in
turnover compared with the same period in 2017. In contrast to
reports of subdued leisure spending nationally, our restaurants,
cafes, pubs and bars were particularly busy throughout the festive
period.
Leasing and occupancy
Occupancy levels in our sought after locations remain high and
we continue to see resilient demand for our regular space. Since 1
October 2018, we have concluded lettings, lease renewals and rent
reviews in the wholly-owned portfolio with a rental value of GBP9.3
million, achieving rental levels at or above ERVs at 30 September
2018. As reported previously, potential occupiers contemplating
large rental or fit-out commitments, particularly for retail space
and where they already have significant exposure to the UK market,
continue to be cautious.
EPRA vacancy(1)
% of total ERV
------------------- ----- -----------------
ERV
GBPm 31.12.18 30.9.18
------------------- ----- -------- -------
Larger schemes(2)
Ready to let 1.1 0.8% 0.6%
Under offer 0.6 0.4% 1.3%
----- -------- -------
1.7 1.2% 1.9%
----- -------- -------
Other vacancy
Ready to let 2.7 1.9% 1.5%
Under offer 1.8 1.2% 1.2%
----- -------- -------
4.5 3.1% 2.7%
------------------- ----- -------- -------
1. Wholly-owned portfolio
2. December 2018: Central Cross; September 2018: Thomas Neal's Warehouse and Central Cross
Larger schemes
Thomas Neal's Warehouse
During the quarter, we announced the letting of Thomas Neal's
Warehouse for an exciting new food market concept, which will trade
under the name "Seven Dials Market". The space is now being fitted
out, and we expect it will be open for trading in late summer
2019.
Central Cross
Currently, 71% of the scheme's rental value has been contracted
or is under offer. Just three shops (ERV: GBP1.1 million) remain
available.
Other EPRA vacancy at 31 December 2018 was 3.1% (ERV: GBP4.5
million), of which 1.2% (ERV: GBP1.8 million) was under offer.
Space held for or undergoing refurbishment(1)
% of total ERV
--------------------- ----- -----------------
ERV
GBPm 31.12.18 30.9.18
--------------------- ----- -------- -------
72 Broadwick Street 4.0 2.8% 2.8%
Other schemes 6.5 4.6% 4.8%
----- -------- -------
Total 10.5 7.4% 7.6%
--------------------- ----- -------- -------
1. Wholly-owned portfolio
At 31 December 2018, space held for or undergoing refurbishment
extended to some 165,000 sq. ft. and represented 7.4% of total
ERV.
At 72 Broadwick Street, we have submitted a planning application
to introduce new retail, restaurant and leisure uses, extend and
refurbish the remaining office space, and reconstruct the
residential accommodation. If our application is approved, we
expect to start our works on this 65,000 sq. ft. scheme in the
summer.
At 31 December 2018, other schemes underway extended to
c.100,000 sq. ft. across 36 projects. The ERV of this space was
GBP6.5 million (4.6% of total ERV). We are already seeing
encouraging interest in the restaurant element of these
schemes.
Acquisitions and disposals
Since 1 October 2018, we have acquired a pub in Fitzrovia for
GBP5.6 million (including acquisition costs) and disposed of a
non-core asset for GBP2.6 million, 11.7% above book value at 30
September 2018.
As previously reported, the forward-purchase of a long leasehold
interest in 90-104 Berwick Street for GBP41 million (including
acquisition costs) has been delayed. We currently expect the vendor
to complete the development by mid-2019, which, subject to
satisfying various contractual conditions, will enable us to
conclude this strategic acquisition.
The availability of properties to buy in our locations and which
meet our strict criteria has been exceptionally limited in recent
months. With continuing macro-uncertainties, we currently expect
existing owners will remain reluctant to dispose of assets which
offer both security and long-term growth prospects.
Finance
At 31 December 2018, net debt stood at GBP887.9 million. The
blended cost of debt remained at 3.2% and our marginal cost of
borrowing under our committed undrawn facilities was 1.7%.
Elizabeth Line
It is now expected that the opening of the Elizabeth Line will
be further delayed, possibly into 2020. Whilst disappointing, once
open, it will bring long-term benefits to the West End. In the
meantime, the delay is not having any noticeable impact on appetite
for space in our locations, which are uniquely well-placed to
benefit from the significant increase in visitors the service is
forecast to deliver once it becomes fully operational.
Ends
About Shaftesbury
Shaftesbury is a Real Estate Investment Trust which owns a
portfolio extending to 15 acres in the heart of London's West End.
Shaftesbury focuses on retail, restaurants and leisure in highly
popular, sought-after and prosperous locations mainly concentrated
in Carnaby, Seven Dials and Chinatown but also include substantial
ownership in East and West Covent Garden, Soho and Fitzrovia.
The portfolio comprises nearly 600 shops, restaurants, cafés and
pubs, extending to 1.1 million sq. ft., 0.5 million sq. ft. of
offices and 593 apartments. All our properties are close to the
main West End Underground stations, which currently handle c. 228m
passengers p.a., and within ten minutes' walk of the two West End
transport hubs for the Elizabeth Line, at Tottenham Court Road and
Bond Street, which long-term projections indicate could be handling
200 million passengers annually.
In addition, we have a 50% interest in the Longmartin joint
venture, which has a long leasehold interest, extending to 1.9
acres, in St Martin's Courtyard in Covent Garden.
Our proven management strategy is to create and foster
distinctive, attractive and prosperous locations. We have an
experienced management team focused on delivering our objective of
long-term growth in rental income, capital values and shareholder
returns. We have a strong balance sheet with conservative
leverage.
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.
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END
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