SHB.L Regulatory News (SHB)

Shaftesbury PLC

Trading and finance update

For the period 1 October 2016 to 10 February 2017

Highlights

Although longer-term political uncertainties continue, in recent months, confidence in the medium term prospects for the UK economy has stabilised and domestic consumer spending has been resilient. The West End, with its added advantage of world-class visitor attractions and an unrivalled choice of restaurants, cafés, bars and shops, continues to attract ever-growing numbers of international visitors, who are currently benefitting from advantageous currency exchange rates. These factors have contributed to good footfall and increased trading volumes across our locations over the traditionally busy festive period, and into January.

With its exceptional visitor economy and diverse employment base, the long-term outlook for footfall and spending in the West End is positive, and underpins continuing good demand for accommodation in our carefully curated, popular locations. Throughout the period, vacancy rates in our portfolio have remained low, available space has attracted considerable interest and leasing activity has continued to meet our expectations.

EPRA vacancy at 31 December 2016

EPRA vacancy at 31 December 2016 stood at £3.2 million. Completion of the Thomas Neal's Warehouse scheme increased EPRA vacancy by 0.9% of total ERV. Marketing of this

22,700 sq. ft. retail scheme, which includes 3,000 sq. ft. of restaurant space, commenced last autumn, and we are now evaluating several expressions of interest from potential single occupiers. Together with major public realm improvements to Earlham Street, expected to start shortly, and improvements to Cambridge Circus, which are now underway, the completion and letting of this scheme will bring material long-term benefits to Seven Dials.

At 31 December 2016, available to let vacancy, excluding Thomas Neal's Warehouse, comprised three shops (ERV: £0.4 million), one café (ERV: £0.1 million), 2,800 sq. ft. of office space (ERV: £0.1 million) and thirteen apartments (ERV: £0.4 million).

Space under offer included two shops, three restaurants and cafés, 900 sq. ft. of offices and thirteen apartments.

Space held for or undergoing refurbishment

1. Charing Cross Road/Chinatown and 57 Broadwick Street, Carnaby (9.2016 and 12.2016), and Thomas Neal's Warehouse (9.2016)

Space held for or under refurbishment decreased by 1.3% to 9.7% of total ERV at 31 December 2016 with a number of schemes completing during the period since September, including the Thomas Neal's Warehouse project.

Progress on major schemes

· Charing Cross Road/Chinatown

Our Charing Cross Road/Chinatown scheme, which remains on track to complete in late spring, will bring compound, long-term benefits to our neighbouring ownerships. Marketing of the 32,000 sq. ft. of retail space on Charing Cross Road and 13,500 sq. ft. of restaurant space, fronting Newport Place and Newport Court, has now commenced. Letting periods will be longer than for the smaller space we traditionally have to offer, as occupiers will be making considerable investment in fitting out the large, prominent units we are creating.

We expect Westminster City Council's scheme to create a part-pedestrianised public square in Newport Place, at the eastern end of Gerrard Street, will commence in late spring. This will significantly improve the public realm in Chinatown and, subject to licensing and planning, provide the possibility for al-fresco dining for our newly created restaurants.

· 57 Broadwick Street, Carnaby

Construction at our mixed-use project at 57 Broadwick Street, at the eastern entrance to Carnaby, is progressing well. The scheme will provide 8,000 sq. ft. of retail and restaurant space over the lower floors, 20,000 sq. ft. of new grade A office accommodation across the upper floors and two apartments totalling 2,000 sq. ft. We expect completion in phases from the end of 2017.

Other schemes

Other schemes underway at 31 December 2016 involved the reconfiguration and improvement of 45 buildings and included 12,200 sq. ft. of shops, (ERV: £1.5 million), 19,800 sq. ft. of restaurants and cafés (ERV: £1.4 million), 35,200 sq. ft. of office space (ERV: £2.0 million), and 37 apartments either being created or up-graded (ERV: £1.3 million).

We continue to investigate and progress schemes to improve the rental prospects and value of buildings across our portfolio. This often involves negotiating the early surrender of existing leases to enable us to implement our ideas. In January 2017, we negotiated vacant possession of a 6,200 sq. ft. restaurant unit in Carnaby. We have now commenced works to reconfigure and improve this space, which will provide two valuable additions to Carnaby's casual dining offer. We estimate the rental value of the completed scheme to be £0.6 million.

Acquisitions

Since 1 October 2016, we have acquired one restaurant and 2,300 sq. ft. of vacant office space with planning consent for residential use, at a total cost of £9.7 million. Currently, we are in advanced discussions on further acquisitions.

The availability of assets to buy which meet our strict criteria continues to be limited but we continue to identify and investigate a number of potential acquisitions.

Finance

At 31 December 2016, total debt, including the Group's 50% share of debt in its Longmartin joint venture, was £878.6 million and our undrawn committed facilities totalled £201.2 million. The weighted average cost of debt was 3.8%, 10 basis points lower than at 30 September 2016. The current marginal cost of our undrawn facilities is around 1.3%.

1. Pro-forma for the £285m bond issue and cancellation of swaps with a notional principal of £55m in October 2016.

2. Based on nominal value of debt

3. Including our 50% share of the Longmartin joint venture

4. Including non-utilisation fees on undrawn facilities

With long-term interest rates rising over the last quarter of 2016, the fair value deficit of our interest rate swaps fell to £64.0 million, a like-for-like decrease, excluding swaps terminated in October 2016, of £12.1 million.

10 February 2017

For further information:

About Shaftesbury

Shaftesbury PLC is a Real Estate Investment Trust, which owns a unique real estate portfolio extending to 14 acres in the heart of London's West End - a highly popular, sought-after and prosperous destination for visitors and businesses. Our holdings are concentrated in Carnaby, Covent Garden, Chinatown, Soho and Charlotte Street.

Our objective is to deliver long-term outperformance in growth in rental income, capital values and shareholder returns.

We focus on retail, restaurants and leisure in the liveliest parts of the West End. Our portfolio now comprises 585 shops, restaurants, cafés and pubs, extending to over 1 million sq. ft., and accounting for 70% of our current income. In our locations, these uses have a long record of occupier demand exceeding their availability. The portfolio also includes 408,000 sq. ft. of offices and 559 apartments for rent, which provide 16% and 14%, respectively, of our current income.

In addition, we have a 50% interest in the Longmartin joint venture with The Mercers' Company, which has a long leasehold interest in St Martin's Courtyard in Covent Garden. Extending to 1.9 acres, it includes 21 shops, ten restaurants and cafés, 102,000 sq. ft. of offices and 75 apartments.

Our proven management strategy is to create and foster distinctive, attractive and prosperous locations. Its implementation is supported by an experienced management team that has an innovative approach to long-term, sustainable income and value creation and a focus on shareholder returns. We have a strong balance sheet with modest leverage.

Forward-looking statements

This document may contain certain 'forward-looking' statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.

Any forward-looking statements made by, or on behalf of, Shaftesbury PLC speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Shaftesbury PLC does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Information contained in this document relating to Shaftesbury PLC or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance.

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