Shaftesbury swings to a loss as Covid-19 bites into portfolio value

Jun 10, 2020
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The value of London landlord Shaftesbury’s property portfolio slumped by 7.9% to £3.5 billion during the first half of the 2020 financial year, as the Covid-19 crisis hurt the company’s ability to collect rent from hard-hit retailers.

Shaftesbury owns more than 100 shop units in Carnaby Street - Carnaby London

Shaftesbury, which has a portfolio of shops, pubs, restaurants and offices in central London, said it made a loss of £287.6 million in the six months to 31 March. Whilst the period only reflected the start of the lockdown, it showed a dramatic change of circumstances compared to last year, when the company had profits of £38.7 million.

Despite this, shares in the company rose in early trading after CEO Brian Bickell reassured investors that the portfolio has “a long history of structural resilience”.

Unsurprisingly, the chief executive chose to focus on the company’s future in the half-year report. 

“London's pre-eminent position amongst the world's leading cities continues to underpin the long-term prospects for our exceptional portfolio” he said.

“Our c.600 buildings in carefully curated, affordable locations have a long history of high occupancy, growing income and the ability to adapt to accommodate changing uses and occupier expectations.”

And the report gave hints of how Shaftesbury will operate going forward, offering a wider array of tailored rent solutions for tenants and monthly rent collections rather than quarterly. The company also expects the structure of leases to evolve to meet new needs post-Covid-19, signalling more flexibility.

It comes shortly after property peer Capco acquired a stake in the business from tycoon Samuel Tak Lee. The transaction, worth £436 million, has fuelled speculation about a potential merger between the two companies. Capco owns a large estate in London’s Covent Garden.

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