Shaftesbury profit hit by slowing valuation growth
West End investor and developer Shaftesbury saw its pre-tax profit fall by 41.8% to £175.5m as valuation growth across its 15-acre retail and leisure-led portfolio slowed markedly in the second half of the year.
The REIT’s revaluation surplus in the 12 months to the end of September was £123.1m, down from £230.6m in 2017, reflecting a like-for-like increase of 3.8%, of which 3% arose in the first half.
Although valuation growth was down compared with the previous year, the 3.8% uplift in the total portfolio to £3.95bn still drove a 4.1% increase in the property company’s EPRA net asset value per share which came in at £9.91 a share.
West End investor and developer Shaftesbury saw its pre-tax profit fall by 41.8% to £175.5m as valuation growth across its 15-acre retail and leisure-led portfolio slowed markedly in the second half of the year.
The REIT’s revaluation surplus in the 12 months to the end of September was £123.1m, down from £230.6m in 2017, reflecting a like-for-like increase of 3.8%, of which 3% arose in the first half.
Although valuation growth was down compared with the previous year, the 3.8% uplift in the total portfolio to £3.95bn still drove a 4.1% increase in the property company’s EPRA net asset value per share which came in at £9.91 a share.
Shaftesbury also reported a 14.4% NAV uplift to £3bn, while EPRA earnings increased 14% year-on-year to £51.7m. In addition, earnings per share rose by 5.6% to 17.1p.
Over the course of the year the company’s net debt decrease by £72.9m to £841.3m as did its LTV from 26.7% in 2017 to 22.8% for 2018, while revenue rose to £122.1m for the year ended 30 September 2018, up from £111.5m for 2017.
Shaftesbury said cash and available debt resources stood at £343.5m, of which £92.7m had already been earmarked for investment.
Total ERV was estimated by Shaftesbury’s valuers Cushman & Wakefield at £154m.
During the year the West End landlord reported leasing transactions with a rental value of £31.4m having completed, but noted that the average period to let space was now taking around four weeks longer as potential occupiers became more cautious, particularly for those with exposure to UK-wide consumer spending trends.
Brian Bickell, chief executive at Shaftesbury, said: “It has been another year of good progress with growth in income, earnings and the value of our portfolio.
“Footfall and spending in our locations continues to be largely unaffected by the widely reported headwinds affecting the national economy and consumer confidence.
“General demand continues to be firm, buoyed by the trading conditions our tenants are reporting.”
Shaftesbury’s pipeline includes its plans for 72 Broadwick Street, W1, which it has now taken vacant possession of after acquiring the property late last year.
A planning application is expected to be submitted shortly for the 65,300 sq ft property with work expected to begin next summer on the project. The redevelopment is predicted to cost £30m and take two years to complete.
Excluding 72 Broadwick Street, Shaftesbury had 47 other schemes under way at 30 September 2018, extending to 109,400 sq ft and representing 4.8% of ERV. These included 39,600 sq ft of restaurants and cafés (ERV: £2.9m), 10,900 sq ft of shops (ERV: £0.6m), 39,500 sq ft of office space (ERV: £2.5m), and 32 apartments being built or upgraded (ERV: £0.9m). Capital expenditure totalled £25.3m
Meanwhile, the forward purchase of 90-104 Berwick Street, for £41m is now expected to complete in mid- 2019, as a result of delayed completion of the vendor’s redevelopment scheme.
To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette
