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Why Shaftesbury is still in the place to be

Tourists attracted by the weak pound, better travel links and a diverse revenue stream are all good news for the property owner
November 29, 2016

As landlord to an estate of restaurants, offices, retail outlets and apartments in the heart of London's tourist belt, Shaftesbury (SHB) is fairly well protected from the trials besetting the broader real estate sector. And while headline profits were affected by a smaller revaluation surplus, adjusted net asset value grew by 2.2 per cent to 888p, while net property income was 6.7 per cent higher at £84.1m.

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Net asset value would have been 24p per share higher without the cost of early termination of debenture debt and interest rate swaps on a notional £55m. However, future finance costs will fall after the 8.5 per cent debenture stock was refinanced with a 2.5 per cent mortgage bond, which raised £285m and provided additional net resources of £189m. Termination of the interest rate swaps will save £1.9m a year. Overall, the weighted average cost of debt fell by a percentage point to 3.9 per cent and the average maturity of debt increased.

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