Operating at the more mature end of the property market, Shaftesbury (SHB) once again delivered solid rental growth during the six months to 31 March. The West-End landlord owns 14 acres of prime tourist London. Just over a third of the income is generated from shops, and a further third from restaurants and cafes. Offices generate about 17 per cent and residential 13 per cent.
Rents receivable rose 9 per cent to £44.8m, driven by a combination of acquisitions, rent reviews and the completion of refurbishment and redevelopment schemes. Annualised current income grew by 5 per cent to £90.6m, but demand for space and higher valuations lifted the full rental potential of the estate to £114m, giving a premium of nearly 26 per cent. Most of this embedded value will be realised over the next 4-5 years as leases expire and rents are reviewed.
Acquisitions included £57.1m for Newport Sandringham, a key entrance to China Town. While the initial rental yield on the deal was very low, at 2.45 per cent, most of the leases and licences are short-term. Once a £10m refurbishment programme is complete, rental income is expected to rise significantly.
Analysts at Liberum have upgraded their forecast of adjusted book value from 608p to 629p for the September year-end (from 567p in 2013).
| SHAFTESBURY (SHB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 664p | MARKET VALUE: | £ 1.84bn | |
| TOUCH: | 664-665p | 12-MONTH HIGH: | 687p | LOW: 573p |
| DIVIDEND YIELD: | 1.9% | DEVELOPMENT PROP: | nil | |
| PREMIUM TO NAV: | 16% | |||
| INVESTMENT PROP: | £2.26bn | NET DEBT: | 34% | |
| Half-year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 471 | 82 | 32.1 | 6.25 |
| 2014 | 572 | 121 | 46.3 | 6.5 |
| % change | +21 | +47 | +44 | +4 |
Ex-div: 11 Jun Payment: 04 Jul | ||||
