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Shaftesbury resilient amid retail gloom

The West End landlord managed a 5.2 per cent rise in property income

Shaftesbury resilient amid retail gloom

Shaftesbury’s (SHB) focus on London’s West End provided decent insulation against the wider slowdown weighing on the retail property sector in its half-year to March. Net property income rose 5.2 per cent to £48.6m in the period, although a much lower boost from the revaluation of the investment portfolio depressed pre-tax profits.

IC TIP: Hold at 850p

A 2.1 per cent rise in like-for-like estimated rental values for the wholly-owned portfolio was set against a flat equivalent yield, which pushed the valuation up just 1.6 per cent, year on year. Meanwhile, a decline in Long Acre retail estimated rental values pushed down the valuation of the Longmartin joint venture and meant the combined portfolio rose just 1.1 per cent in value. However, there is still value to be unlocked from the portfolio, as reversionary potential stands at £30.6m, 26 per cent above current annualised income. Almost £14m of that refers to refurbishment schemes already underway.

Lettings with a rental value of £16.6m were completed at 6 per cent above March 2018 estimated rental values, including two shops and the final restaurant at Central Cross, which is now 87 per cent let.  

Analysts at Numis expect adjusted net asset value (NAV) of 1,018p for the September 2019 year-end, up from 991p at the same time last year.

SHAFTESBURY (SHB)    
ORD PRICE:850pMARKET VALUE:£2.61bn
TOUCH:849.5-850.5p12-MONTH HIGH:1,006pLOW: 812p
DIVIDEND YIELD:2.0%TRADING PROP:nil
DISCOUNT TO NAV:14%  
INVESTMENT PROP:£3.88bnNET DEBT:28%
Half-year to 31 MarNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201897812441.78.3
20199913912.68.7
% change+1-69-70+5
Ex-div: 13 Jun   
Payment: 5 Jul