West End landlord Shaftesbury swings to £700m loss
West End landlord Shaftesbury swung to a loss of almost £700m this year as the value of its retail and hospitality properties plummeted due to the coronavirus pandemic.
The figures
Shaftesbury this morning reported a loss after tax of £699.5m, compared to profit of £26m in the previous year, due to revaluation deficits.
Net property income was down 24.2 per cent to £74.3m, due to the consequences of the pandemic including a 3.5 per cent drop in like-for-like rental income and charges for credit losses and impairments of £21.9m.
Shaftesbury said its portfolio valuation was £3.1bn, down 18.3 per cent on 2019, with a revaluation deficit of £698.5m.
The value of its West End properties have fallen due to a drop off in occupier demand and increasing vacancies across London’s shopping district.
Why it’s interesting
Shaftesbury said that businesses across the West End, which rely on the usually-predictable, exceptional levels of visitors and spending, have been “severely affected” by the Covid-19 crisis.
Despite government help, there has been an increase in business failures across the West End, Shaftesbury said.
Meanwhile, the developer’s 624 residential apartments, which are predominantly let to overseas renters, have also taken a hit during the pandemic as people returned to their home countries.
What Shaftesbury said
Chief executive Brian Bickell said: “Rarely in history has the world seen such widespread disruption to normal patterns of life.
“Only now are we seeing the first positive signs that conditions will begin to improve in the year ahead.
“The pandemic has had a significant impact on our performance, particularly during the second half of the financial year, depriving our hospitality and retail occupiers of footfall and trade and resulting in reduced rent collections, increased vacancy, reduced occupier demand and a fall in property valuations.
“Our key priority has been, and continues to be, supporting our occupiers through this period of disruption.
The economies of London and the West End have a long history of structural resilience, having weathered many episodes of challenge and uncertainty.
“Their unique features, which come from a culture of constant evolution across a broad-based economy, attracting talent, creativity, innovation and investment from across the world, will hasten their recovery and reinforce their enduring appeal to businesses, visitors and residents alike.”