Shaftesbury Capital PLC Reports Strong Leasing Performance with 147 Transactions and 7% Rental Growth

Shaftesbury Capital PLC has reported a strong start to 2024. The company’s portfolio, valued at £4.75 billion, spans key areas of London’s West End, including Covent Garden, Carnaby, Soho, and Chinatown. The latest trading update, released ahead of the Annual General Meeting (AGM), highlights impressive leasing activity, strategic asset management, and a solid financial position.

Strong Leasing Activity

Overview of Leasing Performance

Shaftesbury Capital completed 147 leasing transactions from January to May 2024. These transactions represent £22.4 million of new contracted rent. The new rents averaged 7% above the December 2023 Estimated Rental Value (ERV) and 16% higher than previous passing rents.

Leasing Transactions Summary:

UseNumber of TransactionsNew Contracted Rent (£m)% Above Dec 2023 ERV% Above Previous Passing
Retail308.04%17%
Hospitality & Leisure163.57%19%
Offices238.012%19%
Residential782.92%7%
Total14722.47%16%

Retail Sector Performance

The retail sector witnessed robust demand with 30 transactions. This led to a new contracted rent of £8.0 million. Notable signings included the luxury makeup and skincare brand Charlotte Tilbury, which is upsizing to a new flagship store.

Hospitality and Leisure Sector

Hospitality and leisure leasing also saw strong performance with 16 transactions, resulting in £3.5 million of new contracted rent. Significant signings included Goldies, The Counter, and The Little Violet Door.

Office and Residential Sectors

The office portfolio performed exceptionally well, with 23 transactions and new contracted rents totaling £8.0 million. Residential leasing maintained steady growth with 78 transactions, reflecting limited vacancy and ongoing rental growth.

Strategic Asset Management

Asset Sales and Acquisitions

Since the merger, Shaftesbury Capital completed £213 million of asset sales, reinvesting £82.9 million in target acquisitions. In March 2024, the company acquired freehold interests in 25-31 James Street, Covent Garden, for £75.1 million. This acquisition offers significant asset management and rental growth opportunities.

Refurbishment Projects

The company has been actively refurbishing its portfolio, with ERV of space under refurbishment totaling £15.9 million across 179,000 square feet. This represents 6.8% of the portfolio ERV, with £4.8 million pre-let.

Vacancy and Letting Space

The available-to-let space is 2.5% of ERV. When combined with 2.9% under offer, the total EPRA vacancy stands at 5.4%. The low vacancy rates reflect the high demand for Shaftesbury Capital’s well-located properties.

Financial Strength and Sustainability

Liquidity and Debt Management

Shaftesbury Capital boasts over £500 million in liquidity from undrawn bank facilities and cash. Group net debt stands at £1.45 billion, representing an EPRA loan-to-value (LTV) ratio of 30%, down from 31% in December 2023. The company’s weighted average cash cost of drawn debt is approximately 4%, reducing to 3.4% when considering interest income and hedging benefits.

Sustainability Initiatives

In line with its commitment to sustainable practices, Shaftesbury Capital published its first EPRA Sustainability Data Report. This demonstrates the company’s dedication to environmental, social, and governance (ESG) principles.

Positive Market Trends

Growth in Tourism and Footfall

The West End estates are benefiting from high footfall, increased customer sales, and growing levels of international tourism. This trend is expected to continue, driven by London’s status as a global destination.

Introduction of New Brands

The introduction of 23 new brands, including PANGAIA, Alo, and ELEMIS, reflects the appeal and vibrancy of Shaftesbury Capital’s portfolio. These additions enhance the shopping and leisure experience in the West End, attracting more visitors and boosting sales.

Resilience in Retail and Hospitality

The resilience of the retail and hospitality sectors is evident in the strong leasing demand and significant signings. This underscores the enduring attractiveness of central London as a prime location for businesses.

Conclusion

Shaftesbury Capital PLC has started 2024 on a strong footing, with impressive leasing activity, strategic asset management, and a robust financial position. The company’s West End portfolio continues to attract high-quality tenants, driven by high footfall and growing international tourism. With a solid balance sheet and a commitment to sustainability, Shaftesbury Capital is well-positioned to achieve its medium-term growth targets. As the leading central London mixed-use REIT, the company remains a key player in one of the world’s most vibrant property markets.