London property PLC announces return to dividend pay-outs

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The London West End-focused commercial property landlord Shaftesbury Plc has reported an encouraging set of results announcing a resumed final dividend payment and a smaller loss than last time.

The financial results were helped by a “bounce back” in the London retail and leisure specialist’s prospects for its core tenant base of hospitality firms and fashion retailers.

The company says it has experience an “encouraging increase in demand for space and lettings; footfall and spending now starting to return.” It feels it is “Well-positioned for gradual recovery and sustainable growth.”

Brian Bickell, Chief Executive, says:

“After more than a year of unprecedented disruption, a revival in the West End’s broad-based economy is now underway. Since the start of re-opening on 12 April, we are seeing an encouraging increase in demand for space and lettings and a return of footfall and spending across our locations. Forecasts point to a sharp rebound in the UK economy but there remains the risk that the recovery could encounter delays and setbacks in the period ahead.

“We expect occupier demand to improve further as businesses seek to locate in our lively, holistically-curated villages. Importantly, the inherent flexibility in our portfolio, and our culture of innovation, will ensure we can continue to adapt our buildings to meet the fast-changing expectations of our occupiers. Growing footfall, prosperity and occupier demand will improve our cash income and earnings and stabilise investment yields.

“As the global pandemic recedes, we are confident that the unique appeal and features of London and the West End will continue to attract businesses and visitors on a scale matched by few other cities, underpinning the long-term resilience and prospects of our portfolio. With our proven, ever-evolving strategy, guided by our experienced, enthusiastic and entrepreneurial team, and supported by a strong financial base, Shaftesbury is well placed to return to sustainable long-term growth. “

Results released before Omnicron

Granted this release was written just before the onset of the Omicron virus strain, but after the initial negative financial markets’ reaction, the general advice from the epidemiologists is not to panic and markets seem to be recovering quickly after the initial shock. Despite this there’s yet again a degree of uncertainty around.

A general view of Carnaby Street, part of retail landlord Shaftesbury PLC’s property portfolio, as the spread of coronavirus disease (COVID-19) continues in London, is that those landlords heavily exposed to non-essential retailers and restaurants are still on a slow, yet steady recovery path.

The pandemic had a big impact

An indication of the impact the pandemic has had on the FTSE 250 company is that its buildings net tangible per share asset values fell by 15% to £6.19 pounds, while its overall portfolio valuation declined by just 5.4% on a like-for-like basis. This is small beer compared to many regional town and city retail valuation falls which in some extreme cases have been down as much as 50%.

Shaftesbury owns around 600 buildings in the heart of London’s West End. It made a loss after tax for the year ended 30 September 2021 of £194.9 million pounds, down from £699.5 million last time and the company has recommended a final dividend of 4 pence per share.

Two quoted UK property giants, Land Securities Plc and British Land Plc, were back in the black when they announced their half-year profit figures recently, partly helped by strong rent collection rates at the heart of their core portfolios, mainly offices and shopping centres.

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