(Sharecast News) - Shaftesbury Capital - the result of the merger between Capital & Counties Properties and Shaftesbury - reported strong demand across all sectors in a trading update on Wednesday, with 173 leasing transactions concluded, surpassing the estimated rental value (ERV) of £11.4m as at 31 December.
The FTSE 250 company said commercial lettings and renewals accounted for £7.9m, representing a 7% increase over the ERV, while residential lettings amounted to £3.5m, surpassing previous passing rents by 9%.
In addition, Shaftesbury Capital said it had successfully completed 35 commercial rent reviews, achieving a rental value of £6.4m, which was 7% higher than the prior passing rents.
Retail, hospitality, and leisure customers also reported positive sales, with aggregate figures 13% higher than those recorded in 2019 on a like-for-like basis.
The increased footfall across London's West End was attributed to growing international tourist numbers, particularly following the recent coronation celebrations.
Shaftesbury Capital said its portfolio boasted low vacancy rates, with 2.9% of the ERV available to let.
Looking at the integration process between Capital & Counties and Shaftesbury, the board said it was progressing well, adding that the actions taken thus far were projected to result in annualised cost savings of £7.5m, exceeding the phasing outlined in the merger documentation.
Additionally, Shaftesbury Capital said it was planning to recycle about 5% of its portfolio value.
The company said it was maintaining a robust balance sheet, with access to more than £440m of liquidity.
Shaftesbury Capital said it was experiencing high demand for well-fitted office spaces in the West End, adding that the Carnaby and Covent Garden development pipeline was well-positioned to meet that demand.
The completion of the scheme at 36 Carnaby Street, fully pre-let or under offer, generated an income of £0.9m, establishing a rental tone of around £100 per square foot.
Its residential portfolio, meanwhile, was also enjoying sustained demand, with available units typically going under offer within "a few days".
As at 31 May, there were seven residential units available to let.
"We are pleased with the first 100 days of activity across Shaftesbury Capital with the integration of our business and talented team progressing well," said chief executive officer Ian Hawksworth.
"We are encouraged by operational progress, prospects for our prime West End portfolio and the benefits we are seeing from the combined platform."
Hawksworth said the company's portfolio had delivered a "strong operating performance", reflecting its qualities and long-term resilience.
"Against a backdrop of macroeconomic uncertainty, demand for space in our West End locations continues to be strong across all uses, with 173 leasing transactions completing in the first five months of the year, at rents on average six per cent ahead of December 2022 ERV providing confidence for rental growth prospects."
At 0830 BST, shares in Shaftesbury Capital were up 0.93% at 119.6p.
Reporting by Josh White for Sharecast.com.
