Shaftesbury Capital PLC, the leading central London mixed-use real estate investment trust (REIT), revealed its interim results for the first half of 2023, impressing investors and analysts alike with excellent operational momentum and strong financial performance. The company’s success follows its recent merger, creating a dominant player in the central London real estate market.
Positive Trading and Leasing Activity:
Shaftesbury Capital reported positive trading conditions across its West End locations, with customer sales surging 15% above 2019 levels. The increase in international visitor numbers bolstered footfall, driving strong demand for retail and hospitality spaces in the portfolio.
During the six-month period, the company completed an impressive 220 leasing transactions, which further confirmed the robust demand. The average rents secured were 5% higher than the December 2022 estimated rental value (ERV), demonstrating the attractiveness of Shaftesbury Capital’s unique portfolio.
Financial Performance:
The interim results reflected strong financial performance and resilience in a challenging macroeconomic backdrop. The company reported a significant increase in total equity, reaching £3.6 billion, compared to £1.6 billion in December 2022. The increase in equity underscored the company’s ability to generate value for its shareholders.
Shaftesbury Capital’s net debt stood at £1.6 billion, with an EPRA loan-to-value ratio of 31%, indicative of a strong balance sheet. The company’s prudent financial management allowed it to navigate uncertainties successfully and maintain a robust position.
Dividend and Returns:
A testament to its financial strength and performance, Shaftesbury Capital declared an interim cash dividend of 1.5 pence per share. The company’s commitment to delivering returns to its shareholders is evident in the dividend payout.
Operational Growth and Resilience:
Shaftesbury Capital’s operational growth and resilience were key factors in its impressive performance. The company introduced 27 new retail and hospitality brands across its portfolio during the period, contributing to annualized gross income growing by 5.6% to £188 million, surpassing pre-pandemic levels.
The company’s low vacancy rate of 2.5% of ERV available to let, along with a reversionary potential of £46.4 million, further reinforced the attractiveness of its portfolio. The strong leasing pipeline and positive trading conditions across West End locations instill confidence in the company’s future growth prospects.
Commitment to Environment and Sustainability:
Shaftesbury Capital emphasized its commitment to environmental sustainability and supporting local communities. The company plans to publish its 2023 Net Zero Carbon Pathway later this year, demonstrating its “retrofit first” approach to managing heritage buildings. Additionally, Shaftesbury Capital’s sustainable refurbishment activities aim to enhance the energy performance credentials of its heritage properties.
Outlook and Joint Ventures: Despite economic uncertainties, Shaftesbury Capital remains optimistic about its growth prospects. The company’s strong leasing pipeline and positive trading conditions in West End locations provide a solid foundation for future growth and returns.
The joint ventures, Longmartin property value of £159 million, and Lillie Square property value of £72 million, represent a small decrease since December 2022 but remain within a favorable range.
Conclusion
Shaftesbury Capital’s interim results for the first half of 2023 demonstrate strong operational momentum and financial growth, positioning it as a leading player in the central London mixed-use real estate market. The company’s commitment to sustainability and its robust financial position bode well for continued success in the years ahead.
