TIDMSHC
RNS Number : 6727U
Shaftesbury Capital PLC
27 November 2023
Press Release
27 November 2023
Investor event and trading update
Shaftesbury Capital PLC ("Shaftesbury Capital") today publishes
a trading update ahead of its inaugural Investor Event, to be held
at 10:30am (UK time) at The Royal Opera House, Covent Garden at
which the senior management team will provide an insight into
Shaftesbury Capital's unique, irreplaceable portfolio and its plans
for growth. The presentation materials will be made available on
the Group's website later today. This announcement includes
unaudited financial information in relation to the period from 1
July 2023 to 15 November 2023 ('the period').
Ian Hawksworth, Chief Executive, commented:
"Our excellent performance has continued into the second half,
with a strong start to the Christmas trading period. The West End
is one of the most vibrant global destinations with an unrivalled
concentration of entertainment and cultural attractions. Footfall
remains high and customer sales are tracking 12 per cent ahead of
last year. There is excellent leasing momentum across all uses with
220 leasing transactions signed so far in the second half, at rents
on average six per cent ahead of June 2023 ERV and a strong leasing
pipeline.
Despite the uncertain macroeconomic backdrop, our prime West End
portfolio continues to demonstrate its resilience and appeal.
Backed by our strong balance sheet, we look forward with confidence
with a focus on delivering further growth and attractive returns as
the leading central London mixed-use REIT."
Summary
-- High footfall across our prime portfolio in the West End with
a strong start to the Christmas trading period, customers reporting
sales in aggregate 12 per cent above 2022 levels and 16 per cent
above 2019 levels
-- Sustained demand across all uses; leasing activity in H2
totalling 220 transactions representing GBP15.6 million of rent,
six per cent ahead of 30 June 2023 ERV
-- Year to date, 440 leasing transactions were completed,
representing GBP30.2 million of rent, nine per cent ahead of 31
December 2022 ERV and introducing 50 new retail and hospitality
brands and concepts
-- Vacancy remains low: 2.2 per cent of ERV available to let (30 June 2023: 2.5 per cent)
-- Continued excellent progress on integration, cost savings
running ahead of initial target and additional opportunities being
identified
-- GBP82 million of asset disposals completed, 12 per cent ahead
of June 2023 valuation, with five per cent of total portfolio value
initially identified to be recycled
-- Robust balance sheet with access to approximately GBP500
million of liquidity(1) and EPRA LTV(1) of 30 per cent (30 June
2023: 31 per cent)
1 Pro forma liquidity and EPRA LTV based on debt and cash
balance as at 30 September 2023 and 30 June 2023 property valuation
(adjusted for disposals)
Medium-term outlook
The West End's large working population and residential
community provide a regular, daily customer base for its retail,
hospitality and leisure businesses. Together with an exceptional
number of domestic and international visitors, this brings a seven
day-a-week trading environment. In turn, this drives sustained
customer demand in a market with constrained supply of commercial
space, providing the fundamentals for long-term rental growth.
-- Our focus is on rental growth, cost control and cash conversion
- We are targeting rental growth of 5-7 per cent per annum on average over the medium-term
- With stable cap rates, this would result in average total
property returns of 7-9 per cent and total accounting returns of
8-10 per cent
- These return targets are intended to indicate overall
direction in the medium term; outcomes for shorter reporting
periods will be highly dependent on activity levels and prevailing
market conditions. Components of the portfolio will have different
return profiles
-- We are continuing to target efficiencies and additional
opportunities as we move beyond the initial stage of integration
following completion of the merger in March 2023. With a focus on
the total amount of property and overhead costs, as well as their
relativity to gross income, we are targeting a significant
reduction in the EPRA cost ratio towards 30 per cent over the
medium-term
-- We will maintain significant liquidity through the next
refinancing cycle, and seek to manage the absolute level of finance
costs to deliver efficient conversion of income to earnings and a
progressive dividend profile
-- As part of our programme to invest in our portfolio,
including sustainability enhancements, it is expected that annual
capital expenditure will on average represent approximately one per
cent of portfolio value
-- Five per cent of total portfolio value is expected to be
recycled initially, including the GBP82 million of asset disposals
completed to date
Excellent leasing momentum across all uses
There has been consistently high footfall across our prime
portfolio in the West End with a strong start to the Christmas
trading period, and customers reporting sales in aggregate 12 per
cent above 2022 levels and 16 per cent above 2019 levels. Covent
Garden and Carnaby hosted successful Christmas lights switch-on
events in early November, marking the start of a programme of
festive events and shopping evenings. Covent Garden has a number of
brand activations across the Piazza including Marc Jacobs and
Sézane, while the vibrant Carnaby Universe Christmas campaign
offers a series of events throughout the period, as well as our
important charity partner, Choose Love.
Excellent leasing momentum continues with 220 leasing
transactions signed so far in the second half of the year, at rents
six per cent ahead of June 2023 ERV with a continued strong leasing
pipeline.
These leasing transactions comprise:
-- 76 commercial lettings and renewals: GBP9.6 million of rent,
seven per cent above 30 June 2023 ERV; and
-- 144 residential lettings and renewals: GBP6.0 million of
rent, 10 per cent above previous passing rents.
440 leasing transactions have been completed so far in 2023
representing GBP30.2 million of contracted income, nine per cent
ahead of December 2022 ERV. Further details are set out in appendix
1 to this announcement.
Leasing transactions concluded from 1 July 2023 to 15 November
2023
Use Transactions New contracted % above
rent June 23
(GBPm) ERV
---------------------- ------------ -------------- --------
Retail 40 5.5 5
Hospitality & leisure 12 1.8 14
Offices 24 2.3 5
Residential 144 6.0 4
---------------------- ------------ -------------- --------
Total 220 15.6 6
---------------------- ------------ -------------- --------
In addition, 22 commercial rent reviews were concluded,
representing GBP7.0 million of passing rent, 13 per cent ahead of
previous passing rents.
We continue to strengthen the customer line-up across the
portfolio with a flurry of new openings including luxury brands
Hublot, Messika and Girard-Perregaux in Covent Garden's Royal Opera
House Arcade. Performance wear brand Hoka opened its new London
flagship store on James Street while Balibaris, the international
menswear label, opened its first European retail location on Floral
Street. UK debut stores in Seven Dials include independent
womenswear brand Odd Muse and British jeweller Missoma.
Award-winning cult make-up concept Sculpted by Aimee opened its new
UK flagship on Foubert's Place, Carnaby while eyewear brand Oakley
is the latest opening on Carnaby Street joining premium outerwear
concept Jott.
Our hospitality offer continues to evolve with the opening of
Italian pasta concept Notto on Henrietta Street, Covent Garden and
Bébé Bob in Soho, located opposite its sibling flagship restaurant
Bob Bob Ricard. Filippino concept Donia opened on the upper floor
of Kingly Court, Carnaby while one of China's leading pastry
brands, Master Bao is set to open in Chinatown.
Demand for high quality, well-fitted office space with amenity
value and excellent environmental credentials remains robust across
the West End with recent lettings commanding a rental tone of
approximately GBP100 per square foot. There is sustained demand for
our residential portfolio comprising 710 apartments, with rental
transactions over the period 10 per cent higher than previous
passing rents, and negligible vacancy.
With strong occupier demand and leasing activity through the
period, vacancy remains low. EPRA vacancy (including units under
offer) was 5.1 per cent of portfolio ERV (30 June 2023: 5.9 per
cent), of which 2.9 per cent was under offer and 2.2 per cent was
available to let (30 June 2023: 2.5 per cent).
Active capital recycling
Since 1 July 2023, we have completed the sale of five properties
for gross proceeds of GBP82 million, 12 per cent ahead of the 30
June 2023 valuation (before sale costs). The five properties had an
ERV of GBP5.5 million. A number of acquisition opportunities are
under review.
Over the medium-term, we expect approximately one per cent of
portfolio value to be invested per annum in refurbishment, asset
management and repositioning opportunities, including actions to
improve energy performance. This year, GBP30 million capital
expenditure has been incurred to date, and capital commitments
amount to GBP27 million. The ERV of space under refurbishment
amounts to GBP13.5 million across 196,000 square feet, representing
5.9 per cent of portfolio ERV (30 June 2023: 6.7 per cent). Further
details are set out in appendix 1.
Strong financial profile
We continue to maintain a strong balance sheet with a focus on
resilience, flexibility and efficiency. There is significant
headroom against debt covenants and access to liquidity of
approximately GBP500 million comprising approximately GBP200
million of cash and GBP300 million of undrawn facilities. Group net
debt was GBP1.5 billion, representing an EPRA loan-to-value ratio
of 30 per cent based on 30 June 2023 property valuations (adjusted
for disposals).
In August 2023, a GBP200 million 10-year secured loan was signed
with Aviva Investors. The proceeds of the loan were used to repay
part of the GBP576 million unsecured facility reducing it to GBP376
million, maturing in December 2024. We are in advanced discussions
regarding a new medium-term bank loan, details of which will be
announced in due course.
All of the Group's drawn debt is at fixed rates or currently has
interest rate protection in place. This caps SONIA exposure at an
average of 2.7 per cent on GBP500 million of notional value to
December 2023 and GBP350 million of notional value capped at 2.3
per cent to December 2024. The weighted average maturity of drawn
debt is five years, and the weighted average cost of debt is 4.2
per cent, which reduces to an effective cash cost of 3.3 per cent
after taking into account interest income on cash deposits and the
benefit of interest rate hedging.
Sustainability and environmental stewardship
As a long-term, experienced and responsible investor,
sustainability has always been an important aspect of delivering
our strategy. We are committed to reducing the impact of our
operations on the environment, whilst engagement and collaboration
with our wide range of stakeholders is integral to our strategy and
values.
We adopt a "low-carbon, retrofit first" approach to
future-proofing our heritage buildings, minimising additional
embodied carbon and air pollution which comes from demolition and
construction, whilst improving their energy performance at modest
financial outlay. We estimate the cost of sustainability
improvements, included in our capex estimates, is on average
approximately 0.1 per cent of portfolio value annually. 78 per cent
of our portfolio by ERV now has EPC ratings of A-C, and we target a
minimum rating of B on all new refurbishment projects.
We are committed to be Net Zero Carbon in our own operations
(scope 1 & 2 emissions) by 2025, and across the whole business
(scopes 1, 2 &3 emissions) by 2030. The combined pathway will
be published on our website in due course.
Appendix 1
Leasing activity from 1 January 2023 to 15 November 2023
-- 162 commercial lettings and renewals: GBP19.5 million of
rent, 11 per cent above 31 December 2022 ERV
-- 278 residential lettings and renewals: GBP10.7 million of
rent, 11 per cent above previous passing rents
Use Transactions New contracted % above
rent Dec 22
(GBPm) ERV
---------------------- ------------ -------------- -------
Retail 75 10.1 11
Hospitality & leisure 30 3.5 13
Offices 57 5.9 8
Residential 278 10.7 6
---------------------- ------------ -------------- -------
Total 440 30.2 9
---------------------- ------------ -------------- -------
In addition, 63 commercial rent reviews have been concluded,
totalling GBP14.7 million, 9.6 per cent ahead of previous passing
rents.
Under offer
Use % of portfolio ERV (GBPm) Area
ERV ('000 sq.
ft.)
---------------------- -------------- ---------- ----------
Retail 0.2 0.4 6
Hospitality & leisure 0.6 1.3 13
Offices 2.0 4.4 49
Residential 0.1 0.2 3
---------------------- -------------- ---------- ----------
Total 2.9 6.3 71
---------------------- -------------- ---------- ----------
Available-to-let space
Use % of portfolio ERV (GBPm) Area
ERV ('000 sq.
ft.)
---------------------- -------------- ---------- ----------
Retail 0.7 1.5 19
Hospitality & leisure 0.6 1.4 18
Offices 0.8 1.7 23
Residential 0.1 0.3 5
---------------------- -------------- ---------- ----------
Total 2.2 4.9(1) 65
---------------------- -------------- ---------- ----------
1. Includes 14 units let on a temporary basis (ERV: GBP2.1 million).
Under refurbishment
Use % of portfolio ERV Area
ERV (GBPm) ('000 sq.
ft.)
---------------------- -------------- ------- ----------
Retail 1.1 2.5 22
Hospitality & leisure 1.6 3.8 70
Offices 2.7 6.1 82
Residential 0.5 1.1 22
---------------------- -------------- ------- ----------
Total 5.9 13.5 196
---------------------- -------------- ------- ----------
Appendix 2
2023 asset disposals to date
-- 19 - 25 Long Acre & 28-29 Floral Street (Leasehold interest)
-- 158 - 159 Drury Lane
-- Walter House, 418-422 Strand (Leasehold interest)
-- 61 Old Compton Street
-- 103 Charing Cross Road
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 GBP4.9 billion at June
2023, 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
restaurants, cafés, bars, shops, residential and offices, our
destinations include the high footfall, thriving neighbourhoods of
Covent Garden, Carnaby, Soho and Chinatown, together with holdings
in Fitzrovia. 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
(primary) and the Johannesburg Stock Exchange (secondary).
Our purpose
Investing to create thriving destinations in London's West End
where people enjoy visiting, working, and living.
Forward-looking statements
This press release contains "forward-looking statements"
regarding the belief or current expectations of Shaftesbury Capital
PLC, its Directors and other members of its senior management about
Shaftesbury Capital PLC's businesses, financial performance and
results of operations. These forward-looking statements are not
guarantees of future performance. Rather, they are based on current
views and assumptions and involve known and unknown risks,
uncertainties and other factors, many of which are outside the
control of Shaftesbury Capital PLC and are difficult to predict,
that may cause actual results, performance or developments to
differ materially from any future results, performance or
developments expressed or implied by the forward-looking
statements. These forward-looking statements speak only as at the
date of this press release. Except as required by applicable law,
Shaftesbury Capital PLC makes no representation or warranty in
relation to them and expressly disclaims any obligation to update
or revise any forward-looking statements contained herein to
reflect any change in Shaftesbury Capital PLC's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based. The information contained in
this press release does not purport to be comprehensive and has not
been independently verified.
Any information contained in this press release on the price at
which shares or other securities in Shaftesbury Capital PLC 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. No statement in this press release is intended to be a
profit forecast and no statement in this press release should be
interpreted to mean that earnings per share of Shaftesbury Capital
PLC for the current or future financial years would necessarily
match or exceed the historical published earnings per share of
Shaftesbury Capital PLC.
Certain industry and market data contained in this press release
has come from third party sources. Third party publications,
studies and surveys generally state that the data contained therein
have been obtained from sources believed to be reliable, but that
there is no guarantee of accuracy or completeness of such data
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTNKABBCBDDNDB
(END) Dow Jones Newswires
November 27, 2023 02:00 ET (07:00 GMT)
Shaftesbury Capital (LSE:SHC)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Shaftesbury Capital (LSE:SHC)
Gráfica de Acción Histórica
De May 2023 a May 2024
