West End specialist Shaftesbury has posted a solid set of interim results with net asset value growth of 1.5% to 470p a share.
Its portfolio, which includes Carnaby Street and parts of Soho, rose in value by 1.4% to £1.7bn in the six months to the end of March.
The group said growth in income continues to be the principal factor behind the increase in the value of its portfolio as like-for-like rents rose 3.5%, giving the portfolio an initial yield of 4.29%.
Analysts pointed to the group’s reversionary potential, which increased from £14.7m to £17.6m. Its estimated rental value was up £4.7m to £96.9m.
Shaftesbury bought £29.4m of assets in the first half, predominantly in Soho with just £2.4m in Covent Garden.
The deals include 12 shops, four restaurants, 3,000 sq ft of offices and three apartments. The group continues to seek new investments and is “particularly keen to add to restaurant and leisure uses”.
The group’s loan-to-value remains low at 31%, with gearing of 45% up marginally on September
It has undrawn committed loan facilities of £157.5m, while total borrowings increased by £43.2m to £538.5m, principally as a result of acquisitions and capital expenditure.
Shaftesbury is planning to start two schemes in Foubert’s Place in Carnaby, the first in June, with the second expected to start in early 2013.
The group also announced that chairman John Manser intends to retire at the conclusion of the 2013 annual general meeting expected to be held on 8 February 2013.
He will be replaced by former chief executive and current deputy chairman Jonathan Lane, who will succeed him as non-executive chairman.
Chief executive Brian Bickell said: “London’s West End continues to be busy and prosperous.
“Throughout the first six months of the financial year our portfolio has been virtually fully let as demand for uses across our West End locations remains healthy.
“London’s reputation as a destination of world renown continues to grow, and this summer’s major events – the Queen’s Diamond Jubilee and the Olympics – will put the city firmly in the world’s spotlight. These events are a unique opportunity for London to promote its many attractions to a global audience.
“Our portfolio, underwritten by the West End’s special features and attractions, continues to flourish and we remain confident that it will continue over time to deliver rising income and rental values. This in turn should bring long-term growth in capital values which, coupled with low obsolescence in our assets, should allow us to maintain our record of out-performing the wider property market.”
bridget.oconnell@estatesgazette.com
