West End sees gradual recovery but cautious Shaftesbury warns on new rules
London’s West End has seen a gradual recovery in footfall from local shoppers and office workers since the government began relaxing its Covid-19 guidance in late June, but new measures will bring more uncertainty to the area, commercial landlord Shaftesbury has warned.
A trading update for the period from April 1 to September 24 released on Friday revealed the full scale of the impact of the government’s attempts to halt the spread of the virus on Central London’s vibrant food and shopping scene.
After an extended period of closure, most restaurants, shops, cafes and pubs have now reopened, and visitor numbers have started to pick up again particularly in the vicinity of Oxford Street, Regent Street, Soho and Leicester Square.
But Shaftesbury, which owns more than 600 properties in these areas, collected just 41% of rent in the six months to 30 September. Of the remaining rent, 10% is expected to be subject to deferred collection arrangements.
Additionally, enquiries for commercial space continue at a “considerably lower volume” than the company would normally expect at this time of the year.
“The course of the pandemic in the short and medium term will continue to dictate the extent of restrictions imposed by the UK and other governments to contain the spread of the covid-19 virus, with implications for the global economy and the pace of recovery. As an international destination, local trading conditions in the West End will inevitably be affected by these macro uncertainties,” Brian Bickell, chief executive said in a statement.
The government’s recent U-turn on office working, coupled with new rules that could last up to six months, are likely to put further pressure on Central London retailers. Shaftesbury said many retail occupiers are reporting considerably lower turnover than in normal conditions and will need further support. Because of this, the firm is extending its bespoke rent packages, including rent payment plans, waivers, deferrals and lease restructuring, to the end of 2020.
In light of current trading conditions and the threat of further pandemic restrictions, Shaftesbury said it will not pay a final dividend for the year.
The real estate investment trust invests exclusively in the liveliest parts of London's West End, with a portfolio that extends to 16 acres.
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