REG - Shaftesbury Capital - AGM Trading Update

Shaftesbury CapitalAnnouncement

23/05/2024 07:00

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RNS Number : 5472P  Shaftesbury Capital PLC  23 May 2024

PRESS RELEASE

23 May 2024

AGM Trading Update

Shaftesbury Capital PLC ("Shaftesbury Capital") publishes a trading update
ahead of the Company's Annual General Meeting to be held at 11:30am (BST)
today.

Ian Hawksworth, Chief Executive, commented:

"It's been a positive start to the year, our West End estates are busy and
vibrant with high footfall, customer sales growth and increasing levels of
international tourism. There is continued strong leasing demand across all
uses with 147 transactions completed in the period, at rents on average 7 per
cent ahead of December 2023 ERV and an excellent leasing pipeline, reflecting
the appeal of our exceptional portfolio.

 

We have completed £213 million of asset sales since merger at a premium to
valuation, reinvesting over £80 million in target acquisitions. Backed by our
strong balance sheet and talented team, Shaftesbury Capital is well-positioned
to deliver growth in line with our medium-term targets as the leading central
London mixed-use REIT."

 

Highlights

·  Strong leasing activity across all uses; 147 leasing transactions,
representing £22.4 million of new contracted rent, 7 per cent ahead of
December 2023 ERV and 16 per cent ahead of previous passing rents

·  Low vacancy; 2.5 per cent of ERV available to let (Dec 2023: 2.1 per
cent)

·  23 new brands introduced including PANGAIA, Alo, ELEMIS, ERGON House and
The Little Violet Door

·  £212.6 million of asset disposals completed since merger; £82.9 million
reinvested in target acquisitions

·  Over £500 million of liquidity (Dec 2023: £486 million) and EPRA LTV of
30 per cent (Dec 2023: 31 per cent)

·  During the period, Shaftesbury Capital published its first EPRA
Sustainability Data Report

 

 

Excellent leasing momentum

There is excellent leasing momentum and low vacancy across all uses. 23 new
brands and concepts were introduced during the period, reflecting the appeal
and vibrancy of our West End portfolio. Customer sales continue to grow
reflecting the positive trends seen in 2023 boosted by increasing levels of
international visitors. Available to let space is 2.5 per cent of ERV, which
when combined with 2.9 per cent under offer results in total EPRA vacancy of
5.4 per cent.

 

Retail and hospitality leasing demand has been strong across the portfolio.
Luxury makeup and skincare concept Charlotte Tilbury is upsizing significantly
to a new flagship store on the Piazza following the success of its James
Street store. There have been a number of significant signings for Seven Dials
including US athleisure brand Alo at the entrance of Neal Street offering
contemporary yoga clothing. British wellness brand ELEMIS will open its debut
London store joining recent openings Odd Muse and Missoma on Monmouth Street.
Axel Arigato is currently fitting out its flagship store on Earlham Street,
marking its second Shaftesbury Capital location. Greek boutique hotel, ERGON
House is set to open in a newly refurbished heritage listed building,
anchoring King Street next year.

 

There have been several new additions across Carnaby | Soho, including new
hospitality signings from Goldies which will offer wood-fired cookery on the
ground floor of Kingly Court, The Counter and The Little Violet Door on Kingly
Street joining hospitality concept Two Floors which has expanded its presence
following the refurbishment of 2-4 Kingly Street. Carnaby Street welcomes
global lifestyle brand PANGAIA, its first UK standalone store. This signing
highlights our approach to active curation, seeking out challenger and high
growth brands. SanHao will be debuting a new restaurant within Chinatown,
offering hand-pulled noodles and soups.

 

The office portfolio continues to perform well, regularly achieving rents of
more than £100 per square foot. Our larger schemes at 68-72 Broadwick and The
Floral are now let or under offer. Our residential offer continues to appeal
to a broad range of occupiers, delivering rental growth and limited vacancy
with 6 units available.

 

 

 

The table below sets out a summary of leasing transactions from 1 January 2024
to 3 May 2024:

 

 Use                             Number of transactions       New contracted rent      % above           % above

                                                              (£m)                     Dec 23 ERV        previous passing
 Retail                          30                           8.0                      4                 17
 Hospitality & leisure           16                           3.5                      7                 19
 Offices                         23                           8.0                      12                19
 Residential                     78                           2.9                      2                 7
 Total                           147                          22.4                     7                 16

 

In addition, 24 commercial rent reviews have been concluded, totalling £8.3
million, 4 per cent ahead of previous passing rents.

 

Active capital recycling and robust financial profile

ERV of space under refurbishment is £15.9 million across 179,000 square feet,
representing 6.8 per cent of portfolio ERV (Dec 2023: 5.8 per cent), of which
£4.8 million has been pre-let.

 

Following £124.4 million of sales this year, including the majority of the
Fitzrovia portfolio, total sales proceeds of £212.6 million (before costs)
have been generated since merger, 3 per cent overall ahead of valuation. These
proceeds have been reinvested in target assets and used to repay borrowings.
In March 2024, we completed the acquisition of the freehold interests in 25-31
James Street, Covent Garden for £75.1 million (before costs). This
acquisition presents asset management and rental growth opportunities as well
as complementing our existing ownership on James Street, a prime retail street
and key gateway into the Covent Garden Piazza. In addition, we have acquired
two assets on Broadwick Street and Marshall Street for £7.8 million (before
costs).

 

Shaftesbury Capital has access to over £500 million of liquidity from undrawn
bank facilities and cash. Group net debt was £1.45 billion (Dec 2023: £1.50
billion), representing an EPRA loan-to-value ratio of 30 per cent on a pro
forma basis (Dec 23: 31 per cent).

 

The current weighted average cash cost of drawn debt is approximately 4 per
cent (Dec 2023: 4.2 per cent) which reduces to an effective cash cost of 3.4
per cent (Dec 2023: 3.4 per cent) taking into account interest income on cash
deposits and the benefit of interest rate hedging. All of the Group's drawn
debt is at fixed rates or currently has interest rate protection in place
until the end of 2025.

 

 

This announcement includes unaudited financial information in relation to the
period from 1 January 2024 to 3

May 2024.

 

 

Appendix 1

 

Under offer

 Use                          % of portfolio ERV    ERV (£m)        Area

                                                                    ('000 sq. ft.) 
 Retail                       0.8                   1.8             14.3
 Hospitality & leisure        1.0                   2.2             23.8
 Offices                      1.0                   2.1             25.3
 Residential                  0.1                   0.1             2.2
 Total                        2.9                   6.2             65.6

 

Available-to-let space

 Use                          % of portfolio ERV    ERV (£m)        Area

                                                                    ('000 sq. ft.) 
 Retail                       0.8                   1.8             23.6
 Hospitality & leisure        0.7                   1.5             37.9
 Offices                      0.9                   2.0             29.2
 Residential                  0.1                   0.2             3.5
 Total                        2.5                   5.5             94.2

1.         Includes 12 units let on a temporary basis (ERV: £1.2
million). (Dec 2023: £2.1 million)

 

Under refurbishment

 Use                          % of portfolio ERV    ERV          Area

                                                    (£m)         ('000 sq. ft.) 
 Retail                       1.3                   3.0          23.1
 Hospitality & leisure        1.1                   2.6          28.2
 Offices                      4.0                   9.3          108.8
 Residential                  0.4                   1.0          19.1
 Total                        6.8                   15.9         179.2

 

 

 

Enquiries:

 Shaftesbury Capital PLC                                                         +44 (0)20 3214 9150
 Ian Hawksworth           Chief Executive
 Situl Jobanputra         Chief Financial Officer
 Sarah Corbett            Director of Commercial Finance and Investor Relations

Media enquiries:

 UK: Hudson Sandler  Michael Sandler   +44 (0)20 7796 4133

 UK: RMS Partners    Simon Courtenay   +44 (0)20 3735 6551
 SA: Instinctif      Frederic Cornet   +27 (0)11 447 3030

 

About Shaftesbury Capital

Shaftesbury Capital PLC ("Shaftesbury Capital") is the leading central London
mixed-use REIT and is a constituent of the FTSE-250 Index. Our property
portfolio, valued at £4.75 billion, extends to 2.9 million square feet of
lettable space across the most vibrant areas of London's West End. With a
diverse mix of shops, restaurants, cafés, bars, residential and offices, our
destinations include the high footfall, thriving neighbourhoods of Covent
Garden, Carnaby, Soho and Chinatown. Our properties are close to the main West
End Underground stations and transport hubs for the Elizabeth Line.
Shaftesbury Capital shares are listed on the London Stock Exchange ("LSE")
(primary) and the Johannesburg Stock Exchange ("JSE") (secondary) and the A2X
(secondary).

Our purpose

Investing to create thriving destinations in London's West End where people
enjoy visiting, working, and living.

Our values

We have a set of values that are fundamental to our behaviour, decision making
and the delivery both of our purpose and strategy: Act with integrity; Take a
creative approach; Listen and collaborate; Take a responsible, long-term view;
and Make a difference.

Forward-looking statements

This press release includes statements that are forward-looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Any
information contained in this press release on the price at which shares or
other securities in the Company have been bought or sold in the past, or on
the yield on such shares or other securities, should not be relied upon as a
guide to future performance.

 

 

 

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