Shaftesbury Capital’s integration was progressing well, CEO Ian Hawksworth said in a trading update on the annual general meeting that was held yesterday.
The merger of Capital & Counties Properties and Shaftesbury to create Shaftesbury Capital was completed on March 6. Shaftesbury Capital’s property portfolio is located in London's West End, focused primarily on Covent Garden, Carnaby, Soho and Chinatown.
On the JSE yesterday afternoon, Shaftesbury’s share price gained 0.72% to R27.82.
“We are pleased with the first 100 days of activity across Shaftesbury Capital... We are encouraged by operational progress, prospects for our prime West End portfolio and the benefits we are seeing from the combined platform,” he said.
Actions to integrate undertaken so far were expected to result in annualised cost savings of £7.5 million (R174m), ahead of the phasing set out in the merger documentation.
Shaftesbury’s balance sheet was strong with access to more than £440M of liquidity.
About 5% of portfolio value was anticipated to be recycled.
He said the strong operating performance of the property portfolio reflected “its exceptional qualities and long-term resilience.”
“Against a backdrop of macroeconomic uncertainty, demand for space in our West End locations continues to be strong across all uses, with 173 leasing transactions completing in the first five months of the year, at rents on average 6% ahead of December 2022 estimated rental value, providing confidence for rental growth prospects," he said in a statement
The group customers had seen “encouraging trading”, with reported sales in aggregate 13% above 2019.
Vacancies were low at 2.9% of estimated rental value.
Positive progress was made to introduce new brands and concepts across the portfolio.
The 173 leasing transactions had a combined rental value of £11.4 million, comprising 74 commercial lettings and renewals and 99 residential lettings.
Retail, hospitality and leisure customers were reporting sales in aggregate 13% above 2019 on a like-for-like basis.
Footfall trends across the West End were positive, buoyed by increasing international tourist numbers, particularly evident through May following the Coronation celebrations and this was anticipated to continue through the summer, the group said.
Demand for high-quality, well-fitted office space across the West End, particularly in its more vibrant areas, remained healthy as well, Hawksworth said.
The Carnaby and Covent Garden development pipeline was well-positioned to capture this demand, with its “high amenity value and excellent environmental credentials”.
There was significant headroom against debt covenants and access to significant liquidity of more than £440m as at May 31, 2023.
At May 31, group net debt was £1.5bn, representing a loan-to-value ratio of 31% based on December 31, 2022 property valuations.
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