Shaftesbury’s West End portfolio has recovered one-third of the decline it suffered during the pandemic.
The wholly-owned portfolio now stands at £3.26bn, a 7.5% increase over the past six months, which the company said was largely driven by rental growth.
The West End landlord, which is in talks to merge with neighbouring estate Capco, lost just over a quarter of its value during the Covid lockdowns, as the lack of tourism and office workers hammered its retail-led portfolio.
Releasing its results for the six months to the end of March, Shaftesbury said its valuation was now 16.9% lower than September 2019, on a like-for-like basis.
The REIT also returned to profit, declaring £247m after tax, against a £338m loss for the same period in 2021.
Chief executive Brian Bickell said: “The continuing strong rebound in the West End economy since the lifting of pandemic restrictions last summer has continued throughout the period.
“The patient, long-term stewardship of our high-profile, centrally-located ownerships, and the actions we took to support our occupiers and stakeholders through the long period of pandemic challenges, have underpinned the welcome recovery we are now seeing in key operating metrics, EPRA earnings and net tangible assets.”
EPRA earnings were £15.6m, up from H1 2021’s £2.1m, a rise of 643%.
Over the period it has chalked up £13.3m in new lettings, along with £3.3m of rent reviews at 17.9% above previous rents. It also made £2.3m from 81 residential lettings, which were up 6.2% on previous rents.
Net property income rose by 55% over the period, from £26.5m to £41.1m.
Bickell said the prospect of an extended period of uninterrupted trading over summer was “already providing a firm foundation for the return to long-term prosperity for the West End and our exceptional portfolio”.
Bickell added that Shaftesbury should be reasonably protected from “macroeconomic and political issues”.
“While London and the West End cannot be completely sheltered from these headwinds, their global status, appeal and broad-based, dynamic economies should provide a considerable degree of protection, which few other locations can match.”
Shaftesbury is sitting on a reasonable warchest to fund further projects, and it said it would step up redevelopments, refurbishments and acquisitions. It currently has just over £300m available and capex commitments of £27.8m.
Commenting on the possible all-share merger with neighbouring estate and Covent Garden owner Capco, Shaftesbury said: “These discussions are ongoing and the full terms of a possible merger have not been finalised. There can be no certainty that any offer will be made.”
View top and average rents achieved, plus latest availabilities in the West End >>
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