SHB.L Regulatory News (SHB)

Shaftesbury PLC

Trading update

Robust trading, good leasing progress and further acquisitions

Shaftesbury PLC, the Real Estate Investment Trust that owns a 15-acre portfolio in London's West End, today announces a trading update for the period 1 April 2018 to 27 September 2018.

Highlights

Brian Bickell, Chief Executive, commented:

"Despite well-publicised uncertainties affecting business confidence nationally, London's West End economy continues to be resilient.

Trading across our restaurants, cafés, bars and shops has been robust over the summer months. In particular, our food and beverage occupiers have benefited from good footfall in our locations and the attraction of a wide variety of carefully-curated, innovative casual dining choices." 

28 September 2018

For further information:

Shaftesbury PLC LEI: 213800N7LHKFNTDKAT98

The Group will announce its results for the year ending 30 September 2018 on Tuesday 27 November 2018.

Overview

Despite well publicised uncertainties affecting business confidence nationally, London's West End economy continues to be resilient. Its global appeal, large working population and exceptional numbers of domestic and international visitors are key ingredients of its thriving seven-days-a-week economy. This unique combination of features provides a considerable degree of insulation from UK-wide challenges.

Trading across our restaurants, cafés, bars and shops has been robust over the summer months. In particular, our food and beverage occupiers have benefited from good footfall in our locations and the attraction of a wide variety of carefully-curated, innovative casual dining choices.

Demand for our smaller, regular space continues to be healthy, although the average time to conclude lettings has increased slightly from six weeks last year to around eight weeks, currently. Vacancy levels in our regular space remain in line with our long-term average, at or below 3% of ERV. Although the current climate is causing prospective occupiers for larger space to be cautious, in recent months we have made considerable leasing progress in our larger schemes in Chinatown and Seven Dials.

Asset management activity

High levels of asset management activity continue across the portfolio, improving our buildings and areas, delivering increasing income and unlocking value. At 31 August 2018, we were progressing 39 projects, extending to 101,000 sq. ft.

In September 2018, we secured vacant possession of 72 Broadwick Street, the large building we acquired in Carnaby in December 2017. This has added 54,100 sq. ft. of commercial space and 11,200 sq. ft. of residential accommodation to the space held for refurbishment. We have recently held a public consultation on our plans for this building, which include creating new retail and restaurant space, refurbishing the remaining office space, and reconfiguring the residential accommodation. We will be submitting a formal planning application later this year and, subject to receiving the necessary consents, expect to start our works in summer 2019.

In the Longmartin joint venture, our mixed-use commercial scheme on the corner of Long Acre and Upper St Martin's Lane currently is on track to complete in spring 2019. We will shortly be commencing a scheme to create three new restaurants in St Martin's Courtyard.

Progress on larger schemes

· Thomas Neal's Warehouse, Seven Dials (0.5% of wholly-owned portfolio ERV)

The proposed letting to an international retailer with whom we had agreed terms has not proceeded. We have now placed this flagship unit, which comprises 19,700 sq. ft. of retail space and 3,000 sq. ft. of consented restaurant space, under offer to an innovative UK-based food-led retail concept.

· Central Cross, Chinatown (2.6% of wholly-owned portfolio ERV)

We have now let or placed under offer space representing 76 % of this scheme's ERV.

- Six of the seven restaurant and café units have been let and, shortly, we expect to place the remaining restaurant under offer.

- We have completed lettings of two of the retail units, whilst a further three units are under offer. We continue to market the remaining two units, representing c 0.4% of the total ERV of the wholly-owned portfolio.

Westminster City Council's extensive public realm scheme encompassing Newport Place and Newport Court, which we have funded, is now complete and has transformed the eastern end of Chinatown.

· 57 Broadwick Street, Carnaby (1.8% of wholly-owned portfolio ERV)

Since April 2018, we have let all of the office and residential space, totalling 17,400 sq. ft. (ERV: £1.5 million).

Acquisitions

The redevelopment of 90-104 Berwick Street, Soho, which we have contracted to purchase once it has been completed, is further delayed. We now anticipate completing the acquisition of this long leasehold interest in mid-2019 (purchase price, including acquisition costs, £41 million).

The availability of assets to buy, which meet our strict criteria, continues to be limited. However, we continue to identify and investigate a number of potential acquisitions, although the timing of purchases is always impossible to predict.

Since 1 April 2018, we have acquired four buildings in Carnaby, Covent Garden, Chinatown and Soho. Comprising one restaurant, three cafés, one bar, one shop and 13,400 sq. ft. of office space, the total cost was £50.4 million, bringing total acquisitions for the year ending 30 September 2018 to £167.8 million.

Elizabeth Line

A delay in the opening of the Elizabeth Line has been announced, and the service is now expected to commence in autumn next year. Although this is disappointing, it will not affect the longer-term benefits that this major addition to London's transport infrastructure will bring to the West End. Our portfolio is uniquely well-placed to benefit from the significant increase in visitors the service is forecast to deliver in the years ahead.

About Shaftesbury

Shaftesbury is a Real Estate Investment Trust, which invests exclusively in the liveliest parts of London's West End. Our objective is to deliver long-term growth in rental income, capital values and shareholder returns.

Focussed on restaurants, leisure and retail, the footprint of our exceptional portfolio now extends to over 15 acres, clustered mainly in Carnaby, Seven Dials and Chinatown, with substantial ownerships in east and west Covent Garden, Soho and Fitzrovia. In addition, we have a 50% interest in the Longmartin joint venture with The Mercers' Company, which has a long leasehold interest, extending to 1.9 acres, in St Martin's Courtyard in Covent Garden.

Our proven management strategy is to create and foster distinctive, attractive and prosperous locations. It is implemented by an experienced management team with an innovative approach to long-term, sustainable income and value creation, and a focus on shareholder returns. We have a strong balance sheet and conservative 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.

Ends