Value of West End landlords’ assets dented by economic volatility

West End landlords Shaftesbury and Capital & Counties Properties have had the valuations of their portfolios dented by economic turbulence in the last few months.

The London-listed Shaftesbury, soon to be merged with neighbour Capital & Counties, posted an update about its first summer of trading not disrupted by Covid measures since 2019.

Its portfolio valuation sat at £3.2bn at the end of September, a drop from the £3.3bn over the period since the end of March. The decline represents a fall of around 3.6 per cent on a like-for-like basis.

Shaftesbury boss Brian Bickell said: “Our occupiers continue to report trading revenues, on average, above 2019 levels and demand for space in our carefully-curated, popular locations remains good across all uses, reflected in a return to pre-Covid occupancy levels and further growth in rental values.

“Valuers have reported an outward shift in commercial valuation yields, due to the impact on investment market sentiment of globally-rising finance rates and the deterioration in the macroeconomic outlook.” 

While Capital & Counties reported Covent Garden valuations to have dwindled two per cent since June to £1.78bn.

Covent Garden, a top tourist destination at Christmas time, has been vulnerable to “volatile” economic movements which have shaken asset valuations.

Ian Hawksworth, chief executive of Capital & Counties, added: “Trading activity at Covent Garden remains resilient with strong leasing demand across all uses, and positive footfall and sales metrics.

“The volatile macroeconomic environment is having an impact on asset valuations, however we are encouraged to continue to see rental growth in our portfolio.”