Shaftesbury Capital saw a strong start to the Christmas trading season at its retail and entertainment focused precincts in London’s West End following a solid second half financial performance, management said yesterday.
London’s West End is a vibrant global destination with a concentration of entertainment and cultural attractions. Shaftesbury, JSE-listed and part of the FTSE-250 Index, held a property portfolio valued at £4.9 billion (R116bn) as at June 30, 2023, and its year end is at December 31.
CEO Ian Hawksworth said yesterday that customer sales were tracking 12% ahead of last year. Two hundred and twenty leasing transactions were signed so far in the second half, at rents 6% ahead of June, and there remained a strong leasing pipeline.
“There has been consistently high footfall across our prime portfolio in the West End with a strong start to the Christmas trading period,” he said. Many Christmas activations were planned.
Leasing deals this year included a flurry of new openings including luxury brands Hublot, Messika and Girard-Perregaux in Covent Garden's Royal Opera House Arcade.
Performance wear brand Hoka opened its new London flagship store on James Street, while Balibaris, a menswear label, opened its first European retail location on Floral Street.
UK debut stores in Seven Dials included womenswear brand Odd Muse and British jeweller Missoma. Cult make-up concept Sculpted by Aimee opened its new UK flagship on Foubert's Place, Carnaby, while eye-wear brand Oakley was the latest opening on Carnaby Street joining premium outerwear concept Jott.
The hospitality offer evolved with the opening of Italian pasta concept Notto on Henrietta Street, Covent Garden and Bebe Bob in Soho, located opposite its sibling flagship restaurant Bob Bob Ricard.
Filippino concept Donia opened on the upper floor of Kingly Court, Carnaby, while leading pastry brand from China, Master Bao was set to open in Chinatown.
Year to date, 440 leasing transactions were completed, and they had introduced 50 new retail and hospitality brands and concepts.
Vacancy was low at 2.2% of ERV (estimated rent value) available to let. (June 30: 2.5%).
“Our prime West End portfolio continues to demonstrate resilience and appeal. Backed by our strong balance sheet, we look forward with confidence with a focus on delivering further growth and attractive returns as the leading central London mixed-use REIT," Hawksworth said in a statement.
Customers reported sales 12% above 2022 levels and 16% above 2019 levels.
Hawksworth said there was good demand across all uses, and leasing activity in the second half at £15.6m of rent was 6% ahead of the ERV of June 30, 2023.
There was progress on integration, with cost savings ahead of initial targets. The Shaftesbury’s merger with Capital & Counties Properties was effective in March.
“Our focus is on rental growth, cost control and cash conversion. We are targeting rental growth of 5-7% a year on average over the medium term.”
This was expected to result in average total property returns of 7-9% and accounting returns of 8-10%. These targets were intended to indicate overall direction in the medium term, the group said.
Outcomes for shorter periods would be dependent on activity levels and prevailing market conditions.
A significant reduction in the costs was targeted over the medium-term. Significant liquidity would be maintained.
Annual capital expenditure was expected to average about 1% t of portfolio value. Five per cent of portfolio value was expected to be recycled initially, including £82m of asset disposals completed.