Join our community of smart investors

Shaftesbury dented by Longmartin decline

The West End landlord suffered a further fall in the value of its retail portfolio
Shaftesbury dented by Longmartin decline

A sharp devaluation in retail properties at Shaftesbury’s (SHB) Longmartin joint venture in Covent Garden weighed heavily on pre-tax profits in the commercial property group's end-September financial year. As a result, the joint venture's equivalent yield increased by 25 basis points to 3.89 per cent, while a valuation decline in larger shops caused a six basis point drop in the wholly owned portfolio to 3.47 per cent.

IC TIP: Hold at 940p

However, net rental income across the portfolio rose by 2.4 per cent on a like-for-like basis, as new lettings and renewals were completed at an average 3.2 per cent ahead of estimated rental values at September 2018. However, that was down from a rate of 5.1 per cent in 2018.  

A precarious retail environment did not hold back development and refurbishment activity, which encompassed  241,600 square foot of space. Once completed, schemes already under way could add £15.5m in annual rental income. 

Broker Panmure Gordon forecasts adjusted net asset value (NAV) of 1,013p at the September 2020 year-end, rising to 1,049p in FY2021.

SHAFTESBURY (SHB)    
ORD PRICE:940pMARKET VALUE:£2.89bn
TOUCH:939.5-941.5p12-MONTH HIGH:993pLOW: 734p
DIVIDEND YIELD:1.9%TRADING PROPERTIES:nil
DISCOUNT TO NAV:4%NET DEBT:30%
INVESTMENT PROPERTIES:£3.89bn  
Year to 30 SepNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201583646716813.75
2016857993614.7
201794930210816.0
20189871765816.8
2019978268.517.7
% change-1-85-85+5
Ex-div: 16 Jan   
Payment: 14 Feb   
*Includes investments in joint ventures