Shaftesbury hails West End recovery: Landlord swings back into profit
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Shaftesbury cheers West End recovery: Landlord swings back to profit as shoppers splash the cash and tourists return
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The owner of vast swaths of London’s West End has turned a profit again as shoppers splurge and tourists return to the capital.
Shaftesbury, a FTSE 250 landlord that owns areas such as Chinatown, Carnaby Street and parts of Fitzrovia near Oxford Street, posted a profit of £119m for the year to the end of September, compared to a loss of £195m in 2021.
Rental income from tenants, including retailers, pubs and restaurants, has returned to pre-pandemic levels, as many reported monthly turnover about 6 percent higher than in 2019.
Sales up: Shaftesbury, which owns areas such as Chinatown, Carnaby Street and parts of Fitzrovia near Oxford Street, posted a profit of £119m for the year to the end of September
Vacancy rates also returned to pre-Covid levels due to rising demand for prime retail and commercial space.
“The year has seen a rapid upturn in the West End economy as Covid-induced disruption eased and patterns of daily activity returned to pre-pandemic normality,” said CEO Brian Bickell.
He added that while the company’s properties “cannot be immune” to challenges in the wider economy, its long-term outlook was “bright”.
The strong recovery allowed the company to increase its dividend by nearly 55 percent to 9.9 pence per share.
Shares in the business rose 1.5 percent, or 5.2 pence, to 364.2 pence.
But one black mark was the value of its 16-hectare property portfolio, which fell 3.6 percent between March and September of the year as rising interest rates and the bleak outlook for the global economy hit property markets.
Despite this, the group’s portfolio was still valued at £3.2 billion at the end of September, up 3.6 per cent from a year earlier.
Commercial landlords like Shaftesbury have also benefited from the pound’s recent weakness, making the UK an attractive destination for American tourists looking to earn more money.
Shaftesbury’s return to profit comes as it prepares to merge with rival Capco, which also has a portfolio of prime London locations, including the Covent Garden market.
The £5bn combination of the two, expected to be completed early next year, will unite some of the West End’s most valuable areas into a 2.9m square meter empire comprising shops, restaurants, offices and homes.
Bickell is expected to step down following the merger and the company will be led by Capco chief executive Ian Hawksworth.
While the merger has been approved by shareholders of both companies, it is being reviewed by competition authorities.
Stakeholders must respond to the possible merger by next Friday at the latest, after which a decision will be taken.