Shaftesbury PLC (LON:SHB), the Real Estate Investment Trust that owns a 16-acre portfolio in the heart of London’s West End, has announced a trading update for the period 1 April 2020 to 24 September 2020.
· Widespread and unprecedented measures to address the Covid-19 pandemic continue to have a significant impact on traditional patterns of travel, business activity and consumer spending.
· Since the relaxation of Government restrictions began to take effect from late June:
– The West End has seen a gradual recovery in footfall with the return of local and domestic leisure visitors and its office-based workforce.
– After an extended period of closure, most of our 611 restaurants, cafés, pubs and shops have now reopened. Bespoke packages of rental and other measures to support their recovery in place and being extended to the end of 2020.
– However, responding to the recent sharp rise in UK Covid-19 infection rates, the Government is now re-introducing national and localised restrictions, with a risk that further measures may be implemented until the situation is brought under control.
· 41% of rents due for the six months to 30 September 2020 collected, 10% are expected to be subject to deferred collection arrangements, 23% are being waived and 26% remain outstanding at 11 September 2020.
· EPRA vacancy at 31 August 2020: 9.7% of ERV (31.3.2020: 4.8%); residential accounted for 46% of the increase, as occupiers from overseas returned to their countries of origin and demand from long-stay international business and leisure travellers halted.
· Enquiries for commercial space continue but at a considerably lower volume than we would normally expect at this time of year.
– Acquired three strategically important buildings in Carnaby and Berwick Street at a total cost of £13.3 million.
– More properties which have a long-term strategic interest for us are now coming to the market.
· In view of current conditions and uncertain near-term outlook, the Board has decided not to declare a final dividend in respect of the year ending 30 September 2020, but intends to resume dividend payments as soon as it considers prudent.
· Where required, interest cover covenant waivers for periods of nine to twelve months from April 2020 completed; constructive discussions now underway to extend their duration.
Brian Bickell, Shaftesbury PLC Chief Executive, commented:
“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.
Longer term, the exceptional qualities and features of London and the West End provide firm foundations for recovery as pandemic disruption recedes. Their long history of embracing change, dynamism, creativity and their enduring global appeal will be their most important strengths in a post-pandemic world of new priorities, expectations and patterns of activity.
Against this backdrop, and with the benefit of our experienced, entrepreneurial and innovative management team, we remain confident in the long-term prospects for our exceptional portfolio and business.”