Annual Results for year ended 30 September 2013

SHAFTESBURY ANNOUNCES 2013 ANNUAL RESULTS

STRONG TENANT DEMAND AND ACTIVE MANAGEMENT DRIVE FURTHER GROWTH IN DIVIDENDS AND NET ASSET VALUE

Shaftesbury PLC ("Shaftesbury") today announces its results for the year ended 30 September 2013. Shaftesbury owns over 13 acres in London's West End comprising over 560 properties in and around Carnaby, Covent Garden, Chinatown, Soho and Charlotte Street.

* Adjusted in accordance with the European Public Real Estate Association ("EPRA") Best Practice Recommendations.

Results

· Portfolio capital value return: +9.5% (IPD Monthly Index: -0.4%). 3-year compound annualised growth rate: +7.4%

· EPRA NAV increased by 13.9% to £5.67

· Net asset value return: 16.3% (2012: 10.1%)

· 50 redevelopment and refurbishment projects in the year across 165,000 sq.ft. (9% of total floor space) have temporarily constrained growth in net property income; completed schemes have let well.

· Annualised current income: £85.9 million (2012: £80.9 million)

Portfolio activity

· Continuing strong demand across all villages and for all uses - particularly restaurants, cafés and leisure:

- Vacancy space available to let and being marketed: 1.3% of ERV

- Lettings, rent reviews and lease renewals of £18.7 million in the year - average 4.5% above ERV

- Like-for-like ERV growth of 4.5% (2012: +3.8%)

· Portfolio reversion now stands at £20.0 million, increased by 5.3% over the year.

· Continuing to identify valuable new schemes within existing portfolio

Acquisitions totalling £28.0 million in period include eight shops, four restaurants and 5,100 sq.ft. of offices. Forward purchase of 6,500 sq. ft. of shops and a new restaurant in Soho

Finance

· Committed unutilised bank facilities: £90.8 million

· Conservative gearing (Loan-to-value ratio: 29.5%)

· Earliest facility maturities 2016 - being addressed in advance of contractual maturities.

Brian Bickell, Chief Executive, commented:

"London's stature as one of the world's leading global cities continues to grow as it becomes an ever-more popular destination for visitors and businesses, and as a place to live. The West End and our central locations are clearly benefiting from London's dynamism and growing global reputation.

Following the successful staging of the 2012 Olympics and Paralympics, which showcased London across the world, there has been a noticeable increase in domestic and international visitors throughout the year. Coupled with a gradual recovery in consumer confidence in the UK and abroad, visitor spending is increasing, encouraging retailers, restaurateurs and other leisure-related businesses to establish new ventures, particularly in and around the West End.

This year, growth in our income and revenue profit has been tempered by the increased amount of redevelopment and refurbishment activity across the portfolio, particularly in Carnaby. The first of the two important schemes in Foubert's Place is now substantially let and, together with a number of other schemes in the portfolio, is now making an important contribution to the revenue growth we expect to see in the coming financial year.

The exceptional qualities of our unique portfolio, located in the centre of one of the world's most exciting, dynamic and prosperous cities, have again been demonstrated this year in the growth in our income and capital values. With our unrivalled knowledge of the areas in which we invest, and our innovative approach to managing our assets, we are confident that, as our business grows, we will continue to deliver good returns to shareholders in the years ahead."

27 November 2013

For further information:

There will be a presentation to equity analysts at 9.30am on Wednesday 27 November 2013, at The London Stock Exchange, 10 Paternoster Square, London EC4M 7LS.

There is a dial-in facility for the presentation. Analysts and investors are welcome to participate. The facility can be accessed by calling +44 (0)20 3139 4830. The PIN code is 32231182#. The presentation document is available on the Group's website www.shaftesbury.co.uk. A recording of the conference call will be available on the Company's website www.shaftesbury.co.uk following the meeting.

About Shaftesbury

Shaftesbury PLC is a Real Estate Investment Trust, which invests exclusively in London's West End. Our wholly owned portfolio, which extends to over 13 acres of freeholds, now includes 330 shops and 234 restaurants, bars and cafés, which together account for 70% of its current income. The 386,000 sq. ft. of offices and 470 apartments in the wholly owned portfolio provide 17% and 13% respectively of its current income.

In addition, we have a 50% interest in the Longmartin joint venture with The Mercers' Company, which has a long leasehold interest in St Martin's Courtyard in Covent Garden. Extending to 1.9 acres, it includes 23 shops, eight restaurants, 102,000 sq. ft. of offices and 75 apartments.

Forward-looking statements

This document may contain certain 'forward-looking' statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.

Any forward-looking statements made by or on behalf of Shaftesbury PLC speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Shaftesbury PLC does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Information contained in this document relating to the Company or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance.

Financial Highlights

* Adjusted in accordance with the EPRA Best Practice Recommendations.

Performance

*Source: Investment Property Databank Ltd © 2013.

 Shaftesbury Group data (other than total shareholder return) derived from financial result 

Chairman's statement

I am pleased to announce another set of excellent results, following a year of good progress for Shaftesbury, in which high levels of activity across our portfolio have driven growth in the value of our business. London and the West End have gone from strength-to-strength, particularly since the Olympics, with record visitor numbers reported to date in 2013. Occupier demand remains strong, and vacancy levels have been low throughout the year.

Our portfolio, now valued at £2.05bn, has continued to perform well this year, delivering a revaluation surplus of £174.3 million, which has increased EPRA net asset value per share by 69p (13.9%) to £5.67 at 30 September 2013. After adding back dividends, the total NAV return for the year was 16.3%.

EPRA profit after tax for the year ended 30 September 2013 was £30.2 million compared with £30.6 million for the previous year. We have had an unusually high level of redevelopment and refurbishment activity during the year, undertaking 50 projects, totalling approximately 165,000 sq. ft., which represented nearly 9% of our total floor area. These schemes, which include our two large projects in Carnaby, will deliver increased rental income in the coming years. Inevitably, they have resulted in higher vacancy levels in the short term, which has tempered growth in income and profits in 2013. Letting space as these schemes have completed has been successful, reflecting strong demand for all uses and across all our villages. At the year end, space available to let and being marketed represented 1.3% of our ERV.

The Board is pleased to recommend a final dividend of 6.25p, bringing the total for the year to 12.5p, an increase of 4.2% compared with last year. The final dividend will be paid on 14 February 2014 to shareholders on the register on 24 January 2014. Of this, 3.75p will be paid as a PID under the UK REIT regime with the remainder being paid as an ordinary dividend.

Dividends declared in respect of this financial year, totalling £31.5 million, are in excess of EPRA profit after tax, which amounted to £30.2 million. This is largely as a result of an increase in the accounting charge for equity-settled remuneration resulting from the continuing strong performance of our portfolio. In recommending this dividend, the Board has taken into account the short-term impact on revenue from the high level of redevelopment activity, the successful letting of completed schemes, and the expected significant contribution to our earnings from schemes that have finished, or are due to complete over the coming year. We expect our dividend to be covered in 2014.

Our portfolio produced a capital value return of 9.5%, which compares to a capital value decline of 0.4% reported by the IPD Monthly Index. This strong performance was the result of like-for-like growth in current income and ERV of 5.4% and 4.5% respectively, coupled with yield compression of 24 basis points in the wholly owned portfolio and 15 basis points in the Longmartin joint venture. Our ERV has grown from £99.9 million to £105.9 million, £20.0 million above current income.

Over the year, our shares delivered a total shareholder return of 14.1% compared with 24.7% shown by the FTSE 350 Real Estate Index. Despite outperforming over the longer-term, this period of relative under-performance has come as the UK economy has shown signs that it is returning to growth. As a result, the market has re-rated the shares of companies with a higher risk profile than ours, particularly of those which have a relatively large proportion of their portfolio focused on central London development.

Our redevelopment and refurbishment programme continues apace, with 21 schemes currently on-site with an ERV of £4.9 million, the largest of which is our 32,500 sq. ft. development fronting both Foubert's Place and Kingly Street. We continue to identify and progress opportunities to unlock further rental growth from within our existing portfolio.

We have purchased properties during the year totalling £28.0 million. In current economic conditions, the supply of suitable properties to buy remains limited in our prosperous locations. Owners in the West End recognise the unique investment qualities of the type of properties we are seeking to acquire and generally only sell when they have a particular need for cash. Our acquisition strategy continues to be focused, ensuring that purchases meet our strict criteria of location, uses, potential for improvement through change of use and refurbishment, and benefits from combination with our existing ownerships.

Robust long-term financing underpins the stability of our business. Our debt represented 29.5% of portfolio value at year end and our earliest loan maturities are in 2016. We are in discussion with existing and new lenders to refinance the earliest maturities and increase our available debt facilities.

There have been a number of changes to your Board during the year. On 1 October 2012, we broadened the knowledge and skills of the Board with the appointment of Sally Walden and Dermot Mathias as non-executive directors. As announced this time last year, I replaced John Manser as non-executive Chairman following his retirement in February 2013.

After serving nine years as a non-executive director of Shaftesbury, Gordon McQueen, our Senior Independent Director and Chairman of the Audit Committee, will retire from the Board at the AGM in February 2014. I would like to thank Gordon for his outstanding commitment and guidance over the past years. Jill Little will become the Senior Independent Director and step down from the chairmanship of the Remuneration Committee. Sally Walden and Dermot Mathias will chair the Remuneration and Audit Committees respectively.

The West End, with its uniquely diverse economy, underpinned by a strong domestic and international visitor base, continues to be a prosperous place for businesses and an exciting place to live. London is going through a period of rapid growth, with its population forecast to grow by 20% to 10 million by 2030. There is major investment in all aspects of its infrastructure to ensure that it can cope with this expansion. Significant regeneration projects in and around the West End, some of which are already under way, will provide new places to work and live, all within a short distance from our vibrant villages.

Sustainable rental growth is the key to delivering attractive returns to shareholders over the long term. I am confident that the benefits from the continuing high volume of activity arising from our proven strategy of innovative and intensive asset management, once compounded across the portfolio, will continue to drive growth in rents and long-term values.

Jonathan Lane

Chairman

27 November 2013

Portfolio performance

This has been another successful year for Shaftesbury, with capital growth of 9.5%, increasing the value of our portfolio by £174.3 million to £2.05 billion. Rents, both current and potential, have grown, and we have made good progress on our numerous schemes. Demand has remained strong across all uses and occupancy levels have been high throughout the year.

PORTFOLIO VALUATION

Our portfolio was valued at £2.05 billion at 30 September 2013 resulting in a revaluation surplus for the year of £174.3 million. This represents an ungeared total property return for the year of 13.4%, compared with the IPD Monthly Index benchmark of 6.5%. This included a strong capital value outperformance totalling 9.9% (Shaftesbury: +9.5%, IPD: -0.4%). The principal drivers of this uplift in value over the year were rental growth, both actual and prospective, and yield compression of 24 basis points in the wholly owned portfolio and 15 basis points in the Longmartin property holdings.

The yield compression during the year, in part, recognises that, as we improve our buildings over the long term, income grows which, coupled with low obsolescence, makes them more valuable. It also takes into account the continued strong investor demand for, and limited availability of, properties in our locations. There are currently no signs of this demand abating.

Rental growth has continued throughout the year, reflecting strong occupier demand for all uses across our villages. Lettings, rent reviews and lease renewals totalling £18.7 million were concluded at an average increase of 4.5% over September 2012 ERVs. This, coupled with acquisitions and falling vacancy, resulted in current income growing by £5.0 million to £85.9 million. The like-for-like increase was 5.4%.

PORTFOLIO REVERSIONARY POTENTIAL

Our strategy focuses on not only delivering growth in current income but also improving the long-term rental prospects of the portfolio. Our valuers have estimated the rental value of our portfolio at year end to be £105.9 million, £20.0 million above current income. £18.2 million of the reversion is attributable to the wholly owned portfolio and £1.8 million to our share of the Longmartin joint venture.

Excluding the impact of acquisitions, the ERV of our portfolio grew, on a like-for-like basis, by 4.5%. Restaurants, cafés and bars showed especially good growth with demand considerably out-stripping the restricted availability of space in the West End.

Of the total reversion, £4.8 million is contracted and will add to current income on the expiry of rent free periods and pre-agreed increases in rents. The ERV of vacant space either available to let or under refurbishment was £8.1 million, including £2.0 million in respect of our major redevelopment on Foubert's Place and Kingly Street, in Carnaby, which is expected to be completed in late 2014. £7.1 million of the reversion should be crystallised over the normal five-year cycle of rent reviews, lease renewals and lease expiries.

We have a long record of not only growing the reversionary potential of the portfolio, but also converting this potential to actual income. 69% of total ERV and 72% of the reversion which is not yet contracted comes from shops, restaurants and leisure uses. Our experience is that, in our locations, demand and rental values for these uses are not cyclical, which gives us confidence that we shall continue to capture this reversion. We believe there is also considerable potential for further rental growth to be unlocked through our continuing intensive active management of the portfolio.

DTZ, independent valuers of our wholly owned portfolio, have, again, noted that our portfolio is unusual because of its concentration of properties in adjacent or adjoining central West End locations, and its predominance of retail, restaurant, café and leisure uses. They have advised the Board that some prospective purchasers might consider that parts of the portfolio, when combined, may have a greater value than that currently reflected in the valuation, which has been prepared in accordance with RICS Valuation Professional Standards.

In our experience, over a three-to-five year period, the values of our villages generally perform in a similar manner. This year, Carnaby (33% of our portfolio) produced capital growth of 10.6% driven by increases in rental income and ERV, particularly for retail and restaurant space. Covent Garden (28% of our portfolio, excluding the Longmartin joint venture) and Chinatown (22% of our portfolio) grew in value by 8.5% and 7.6%, respectively, largely as a result of a number of restaurant lettings during the year which increased contracted rental income and ERVs.

Our holdings in Soho delivered a capital value return of 14.1%, which follows two years of lower growth while we were in the early stages of our long-term investment strategy in this area. The increased valuation of our Soho holdings this year recognises a reduced risk level following successful lettings in the year, completion of redevelopment projects, and the pre-letting of commercial space in our current schemes. In Charlotte Street (3% of our portfolio) values grew by 9.1% as restaurant rental tones increased and residential values rose. The properties in our Longmartin joint venture showed a capital value return of 10.0% over the year driven by ERV growth, particularly from shops and restaurants.

Increase in capital values

ACQUISITIONS

The criteria we apply to potential purchases are very strict. We target acquisitions which:

• are in the heart of the West End, in and around our villages;

• have a predominance of, or potential for, retail and/or restaurant, café and leisure uses; and

• provide potential for future rental growth, either individually or through combination with our existing ownerships.

In our locations, there is always a limited availability of assets which fit these strict criteria. Existing owners recognise the same merits that we see in the exceptionally resilient and prosperous areas in which we invest. However, we remain focused and continue to monitor long-term ownerships and opportunities in our areas, constantly engaging with owners and agents.

During the year, we acquired properties totalling £28.0 million; £19.7 million in Covent Garden and £8.3 million in Soho. These acquisitions included eight shops, four restaurants and 5,100 sq. ft. of offices. In addition, we exchanged contracts to forward purchase a long leasehold interest in 6,500 sq. ft. of retail and restaurant space on the ground floor and basement in the substantial residential-led development currently being constructed on Broadwick Street, in Soho, which is expected to complete in 2015.

REDEVELOPMENT AND REFURBISHMENT ACTIVITY

With 50 projects across 165,000 sq. ft. (9% of our total floor area), this has been a year of increased redevelopment and refurbishment activity. This included our two large schemes, fronting Foubert's Place and Kingly Street in Carnaby, which totalled 40,500 sq. ft., and the refurbishment of two office buildings totalling 28,000 sq. ft. Other projects involved extending and reconfiguring retail and restaurant space, residential conversions, upgrading offices and apartments and contributions to public realm improvements. With our concentration of ownerships, individual schemes frequently have a beneficial impact on adjacent holdings, bringing cumulative and compound improvements to an area.

We provide retail, restaurant and leisure space in shell form and tenants are responsible for the costs of fitting out and obsolescence. Furthermore, as we create apartments to a high standard at the outset, we find obsolescence costs in these holdings are low.

Whilst we undertake many schemes, our outlay is modest. Capital expenditure during the year totalled £20.8 million, representing 1.1% of the portfolio value, marginally above our normal level of 0.8%-0.9%. We continue to identify future redevelopment schemes, which will add to our income and unlock further value from within the existing portfolio, the timing of which will depend on planning permission and securing vacant possession. We are currently on-site with 21 schemes, involving 77,000 sq. ft. and with an ERV of £4.9 million.

DEMAND AND OCCUPANCY

Demand across all our uses has remained strong throughout the year, resulting in continuing high occupancy levels. EPRA vacancy at 30 September 2013 totalled £2.5 million, representing 2.3% of ERV, of which £1.1 million (1.0% of ERV) was under offer. All available restaurants were under offer and we had just 3,000 sq. ft. of offices to let in our wholly owned portfolio. There was a normal residential vacancy level at year end with twenty apartments available, of which twelve (ERV: £0.3 million) were under offer.

Our 8,600 sq. ft. retail scheme on the north side of Foubert's Place completed in late spring 2013 and the two larger units are now let, one of which (ERV: £0.4 million) was under offer at year end. The remaining unit (ERV: £0.2 million) is currently being marketed.

Our major scheme on the site fronting the south of Foubert's Place and Kingly Street is under way, with completion expected by the end of 2014. The total ERV of this scheme now stands at £2.0 million, £1.6 million above pre-scheme income.

The ERV of other schemes totalled £3.6 million (3.4% of ERV), including two restaurants, with an ERV of £0.4 million, which were under offer and three restaurants (ERV £0.7 million) where we secured vacant possession just prior to the year end. Offices undergoing refurbishment included 11,500 sq. ft. in Carnaby (ERV £0.7 million) which are due to complete at the end of 2013. The majority of the residential space being redeveloped (ERV £0.6 million) is expected to be income-producing by the end of 2013.

VACANCY AT 30 SEPTEMBER 2013

Our portfolio

Our wholly owned portfolio comprises over 560 buildings, all of which contain a mix of uses. Shops, restaurants, cafés and bars are on the lower floors, and offices or residential are above.

SHOps - 37% CURRENT INCOME

We have 89 large shops (rent greater than £100,000 p.a.) in the wholly owned portfolio which generate 64% of current income. Fashion accounts for nearly 80% of the income from these larger shops, with the majority of the remainder coming from lifestyle retailers, for example health and beauty. Our 241 smaller shops provide 36% of current income and are an important element of the character and retail mix in our villages. These shops are predominantly let to fashion and lifestyle brands. The Longmartin joint venture has 23 shops, principally occupied by fashion retailers.

Demand for our shops has remained strong throughout the year. The wide range of unit sizes and rental tones in our portfolio attracts a broad range of tenants from those opening UK flagships or first stores through to small independents from both the UK and overseas. We are keen to seek out new retail concepts, which contribute to each village's unique character. We meet potential new occupiers at fashion and lifestyle trade shows in the UK and abroad, as well as maintaining a regular dialogue with existing tenants who are seeking to expand their operations.

We work with retailers to trial and promote their new ideas with short and flexible leases, bringing a steady flow of interesting new concepts and brands to our villages. This approach is particularly suitable for our smaller shops. Successful new ideas lead to operators taking longer leases. Where actual trading experience shows that a new concept is neither meeting our, nor the retailer's, expectations we are able to react quickly.

The cycles of fashion are becoming shorter and without innovation brands can soon become less interesting to consumers. Our flexible leases allow us continually to refresh our tenant line-ups, ensuring our villages maintain their appeal to today's fashion-conscious shoppers.

Our shops are typically let on the following basis:

• 3-5 year term for smaller shops

• 5-10 year term for larger shops

• Space provided in shell form; fit out is at the tenants' cost, with no financial contribution from us

• Short rent free period to help cover the tenants' fitting out period

We invest considerable resources and energy in promoting our villages to potential occupiers and consumers, and sourcing new brands and concepts. We stay in regular contact with tenants and find that, not only do they value our philosophy and the way we manage the villages, but also are a great source of new ideas from their experiences elsewhere.

RESTAURANTS, CAFÉS AND LEISURE - 33% OF CURRENT INCOME

Restaurants, cafés, bars, pubs and clubs are a growing part of our business, now representing 33% of current income. The wide variety of dining and leisure choices is a feature of the West End and forms an integral part of the mix in our villages, complementing our shops and drawing visitors. As with our shops, we seek out and encourage new food and beverage concepts, both from the UK and abroad, to add to the appeal of our villages.

Currently there is unprecedented demand from interesting and well-funded food and beverage operators, which is continuing to drive strong rental growth. Furthermore, planning policies in the West End restrict the creation of new restaurant space, to preserve a balance with other commercial uses.

As with shops, space is provided in shell form. Fit out is at the tenants' cost and is usually substantial, sometimes costing the equivalent of 3-5 years' rent. As a consequence, restaurant businesses prefer longer leases over which to spread this up-front investment.

Typical lease terms:

• Historic leases: 25 years, 5 yearly upward-only rent reviews and security of tenure on expiry

• Newer leases: 15 years, 5 yearly upward-only rent reviews. No security of tenure on expiry

The substantial investment by the tenant, combined with restrictive planning and licensing policies, make our leases valuable assets both for us, as landlord, and for our tenants. Often new operators seek out opportunities to open in our locations by taking an assignment of a lease from an existing tenant, sometimes paying a considerable premium to acquire this interest. Our leases give us considerable control over this process, enabling us to select the most appropriate operators, as well as accelerating asset management opportunities, including re-gearing lease terms and releasing surplus space for other uses and schemes. As a result of this competition for leases, it is often difficult for us to secure vacant possession of our restaurants. However, when we do, there is considerable demand from experienced and new operators seeking to launch innovative concepts.

OFFICES - 17% OF CURRENT INCOME

Offices bring an important working population who shop, dine and socialise in our villages. Most of our office tenants are fashion retailers or businesses in the media, creative and IT industries. Demand remains strong with only 3,000 sq. ft. of space available at year end, and we are seeing steady rental growth. Lease lengths are typically five years.

Most of our offices are relatively small. We have four office buildings each with a total area of between 10,000 and 20,000 sq. ft., three of which are in Carnaby. Otherwise the average office is just 1,300 sq. ft. and our average rent is around £40 per sq. ft.

We have continued converting smaller offices which cannot be adapted to meet the requirements of today's occupiers, often back to their original residential use, where we see more consistent cash flows, lower vacancy levels and significantly reduced obsolescence costs. Where we secure residential planning consents, we often retain the flexibility to return the space back to office use.

RESIDENTIAL - 13% OF CURRENT INCOME

Our apartments bring a residential community, which adds another important strand of life and activity to our villages. This has been a growing part of our business over recent years in all villages, particularly as a result of conversions from space no longer viable for office use. Our apartments, which cater for the mid-market, produce a growing and reliable income stream, with high occupancy levels and low obsolescence risk. Tenancies are typically for three years with annual rent reviews and rolling two-month break options after the first six months.

Whilst we have benefitted from the uplift in capital values over recent years, the key drivers of long-term value in our buildings continue to be the commercial uses on the lower floors. We let our apartments, rather than sell them, to ensure we retain control over the whole building in order not to compromise the management flexibility needed to realise the long-term potential in those valuable lower floors.

PORTFOLIO SUMMARY

*Group's 50% share.

† The Group has a 50% interest of the above.

CARNABY - 33% of our portfolio

Valuation £684.5m

Acquisitions during the year £Nil

Capital expenditure during the year £9.3m

Capital value return 10.6%

Carnaby covers 4.1 acres across twelve streets to the east of Regent Street and south of Oxford Street. It is an iconic destination for visitors and is internationally renowned for youth fashion, particularly new concepts and brands. There are 48 larger shops (income in excess of £100,000 p.a.) in Carnaby, accounting for 85% of the village's retail income. Demand remains strong, particularly from overseas retailers and those wishing to launch flagship stores. The 71 smaller, often independently-run shops, add to the eclectic mix which enhances Carnaby's appeal as a unique shopping destination.

It has been a particularly busy year for lettings in Carnaby as we continue to introduce new retailers and brands to ensure that Carnaby maintains its unique appeal to today's fashion-conscious shoppers. During the year, we have introduced thirteen new retailers for UK flagships, new concepts or their first store in the UK. The total rental value of these lettings was £2.8 million.

Our redevelopment project on the north side of Foubert's Place, which has increased the retail floor space by 5,000 sq. ft., was completed in late spring. We have let the two largest units, representing approximately 80% of the ERV of this scheme, at new rental tones for Foubert's Place, and are now marketing the remaining unit to complementary retailers. While on site with this scheme, we took the opportunity to refurbish nine flats on the upper floors and these subsequently let swiftly at higher rents.

The scheme to redevelop buildings fronting the south side of Foubert's Place and Kingly Street is progressing well, with demolition and enabling works recently completed. This scheme will increase lettable space from 14,500 sq. ft. to 32,500 sq. ft., providing 7,500 sq. ft. of retail space, a 6,500 sq. ft. restaurant, 10,500 sq. ft. of offices and twelve apartments. The rental value of the completed scheme is currently estimated at £2.0 million, an increase of around £1.6 million compared with pre-scheme levels. The estimated total cost is £13.5 million and completion is scheduled by the end of 2014.

The growing variety of interesting restaurants, cafés and bars, which we have introduced in the side streets and in Kingly Court, are adding to Carnaby's reputation as a food destination. Our 41 restaurants, bars and cafés attract customers from within Carnaby, and also from Regent Street, Oxford Street and other busy areas nearby, where the dining offer is more limited.

We have made good progress with repositioning Kingly Court as a food and beverage destination and have commenced further improvements to the courtyard. We have already converted nearly 6,000 sq. ft. of retail space to restaurant use, and have recently secured vacant possession of a 2,000 sq. ft. restaurant with frontages to both Kingly Street and Kingly Court. We are continuing to identify units which are potentially suitable for the introduction of new food-related concepts.

Approximately 59% of our offices, by area, are in Carnaby. They are mainly occupied by retailers, and businesses in the media, creative and IT sectors. Office buildings with space greater than 10,000 sq. ft. make up 29% of the total office area and there are 136 other office tenants occupying an average of 1,200 sq. ft. each. Office rents in Carnaby range from £45 per sq. ft. to £70 per sq. ft.

We expect to complete the refurbishment of an office building totalling 18,500 sq. ft. in Ganton Street by the end of 2013. We shall occupy 7,400 sq. ft. of this space in the New Year and the remaining space will be marketed shortly. Otherwise, just 1,500 sq. ft. of office space was vacant or being refurbished in Carnaby at 30 September 2013.

In the New Year, Kingly Street will be pedestrianised fully between 11 am and 7 am, consistent with the rest of Carnaby, and the pedestrian zone will be extended to the junction with Great Marlborough Street. This will usefully increase the availability of external seating on this increasingly busy thoroughfare.

COVENT GARDEN - 35% of current income*

Valuation £720.4m*

Acquisitions during the year £19.7m

Capital expenditure during the year £5.8m*

Capital value return 8.8%*

* Includes the Group's 50% share of the Longmartin joint venture.

Our wholly owned holdings in Covent Garden extend to 4.5 acres. Together with our 50% interest in the Longmartin joint venture, Covent Garden is our largest investment location.

Covent Garden, with its historic street patterns and architecture, contains half of the West End's theatres. It has a broad range of shops, restaurants, bars and cafés, giving it a distinctive and appealing atmosphere. There is also a long-established and flourishing residential community.

Demand has remained strong across all uses in the year and the level of vacancy has been low. We have completed lettings, lease renewals and rent reviews with a rental value of £6.5 million in the year, including 65 commercial transactions. At year end, available commercial space totalled 10,700 sq. ft. (ERV: £0.8 million), of which 3,200 sq. ft. (ERV: £0.2 million) was under offer.

Our retail strategy for Seven Dials is establishing the area as an international shopping and leisure destination with aspirational and interesting retailers aimed at our target core consumer - 25 to 45 year olds with high disposable income. During the year, we secured 13 new lettings in Monmouth Street, Earlham Street and Neal Street, to retailers either opening their first UK or flagship stores in Seven Dials.

We have introduced a number of exciting new restaurants to Seven Dials, improving the area's reputation as a dining destination. We have also started to refresh the restaurant mix in Neal's Yard and are currently working on plans to improve its entrances, making this a unique food quarter for Seven Dials.

Improvements to the public realm continue to play an important role in the development of our areas. During the year, a trial road closure at the Cambridge Circus end of Earlham Street significantly decreased traffic, creating a more pedestrian-friendly environment and noticeably increasing footfall. We expect that this will soon become permanent and are working with The London Borough of Camden and The Seven Dials Trust on designs to further improve the public realm. New street lighting currently being installed across Seven Dials.

At Cambridge Circus, we are aware that, in anticipation of the greater pedestrian flows expected from the new Tottenham Court Road Crossrail interchange, Westminster City Council are investigating major improvements to this already congested junction.

Longmartin's portfolio continues to make good progress. Demand for all uses has remained strong and our share of available vacant space was just £0.2 million at 30 September 2013. We are now seeking planning consent to make improvements to the courtyard to add to its vibrancy, in conjunction with evolving the tenant mix. In addition, we continue to work on schemes to improve unmodernised buildings on the periphery of the site.

CHINATOWN - 22% of current income

Valuation £446.0m

Acquisitions during the year £Nil

Capital expenditure during the year £2.4m

Capital value return 7.6%

Chinatown, at the heart of the West End's entertainment district, has the largest concentration of restaurants in the UK. The prosperity of this thriving destination is underpinned by the large number of visitors it attracts throughout the day, and into the night, seven days a week.

In Chinatown's prosperous environment, our restaurants remain in demand. With growing interest in innovative Far Eastern cuisine, we are seeking to improve the quality and diversity of restaurants, encouraging a wide variety of cuisines from around South East Asia.

Many of the restaurants in Chinatown are let on historic leases which provide the tenant with an automatic right to renew at the end of the lease term. Whilst this provides excellent security for us as landlord, space rarely becomes available. However, during the course of the year we secured possession of four restaurants, totalling 16,500 sq. ft., and have already introduced new concepts into two of these. We are currently reconfiguring the other two, in Rupert Street and Wardour Street, to produce more efficient restaurant space.

Part of our current strategy is to reposition and improve Rupert Street and enhance values by refreshing the tenant mix and through long-term investment in the public realm. In Rupert Court, which connects Rupert Street to Wardour Street, we are upgrading and extending the restaurants. Drawing on our experiences elsewhere in our villages, we have further ideas for street improvements, which we are discussing with Westminster City Council.

Recognising strong residential demand in the West End, we have embarked on a rolling refurbishment programme to upgrade the quality of our flats in Chinatown and improve rental and capital values. We are also creating new residential space either by adding additional floors or through conversions. We continue to find opportunities to unlock and improve inefficient and under-utilised space on upper floors by introducing more valuable alternative uses, both commercial and residential.

Working with Westminster City Council on public realm initiatives remains an important part of our long-term strategy in Chinatown. During the year, we part-funded Westminster City Council projects which introduced a new traffic management scheme to pedestrianise Lisle Street and the Chinatown section of Wardour Street from 12 noon each day and also extended the pedestrian zone south from Gerrard Street towards Coventry Street. These projects provide additional capacity for pedestrians in busy streets which act as an important gateway from Leicester Square.

SOHO - 7% of current income

Valuation £146.8m

Acquisitions during the year £8.3m

Capital expenditure during the year £3.1m

Capital value return 14.1%

Soho is a lively area filled with cafés, bars, clubs, restaurants and quirky shops lining its narrow streets. Close to many of the West End's attractions, its history, venues, distinctive atmosphere and nightlife create a popular destination for visitors. There are many small businesses, typically in the media and creative industries, and it has a long-established residential community.

The majority of our ownerships are currently centred in and around Berwick Street and Brewer Street: routes through Soho which have, for many years, suffered from fragmented ownership and a lack of investment. Despite the high footfall, rental values are low compared with neighbouring areas. Many of the properties we have acquired were in poor condition. This provides us with refurbishment and reconfiguration opportunities and scope to introduce more valuable uses.

Crossrail is proving to be a catalyst for major investment along the eastern end of Oxford Street. The new western entrance to Tottenham Court Road station, on Dean Street, will bring improvements to the north of Soho, including Berwick Street. There are a number of privately-funded schemes which will help regenerate the area close to our holdings, including the substantial development of the former Trenchard House site on Broadwick Street, where we have exchanged contracts to forward purchase the retail and restaurant elements on the ground floor and basement (approximately 6,500 sq. ft.). Other schemes include the recently completed major development at the western end of Brewer Street, various projects along the east end of Oxford Street, and proposed schemes for Walker's Court and Kemp House at the south end of Berwick Street.

With this investment and regeneration, Soho is currently going through a renaissance, experiencing increased footfall and demand particularly from restaurateurs attracted by Soho's exciting food scene and vibrant nightlife. We are also seeing greater interest from retailers who are attracted not only by Soho's distinctive edginess but also its seven-day trading patterns and competitive rents.

CHARLOTTE STREET - 3% of current income

Valuation £54.9m

Acquisitions during the year £Nil

Capital expenditure during the year £0.2m

Capital value return 9.1%

Charlotte Street is a busy and vibrant location, north of Oxford Street and close to Tottenham Court Road, which is a renowned restaurant destination. Its large office population, dominated by creative, media and tech businesses, and a large student population, add to the cosmopolitan feel of the area.

When it opens in 2018, we expect Crossrail will substantially increase the public transport capacity and footfall in the vicinity of Charlotte Street. The new West End gateway station at Tottenham Court Road is stimulating significant development, which will attract new businesses and increase the residential population in the area.

Important development projects close to Charlotte Street include Fitzroy Place, on Goodge Street, which includes 220,000 sq. ft. of commercial space and over 230 residential apartments, with completion anticipated by summer 2014. In addition, the redevelopment of the Royal Mail site on Rathbone Place is expected to start early next year, delivering offices totalling 217,000 sq. ft., 42,000 sq. ft. of retail space and 162 apartments.

Although this is the smallest of our villages, we remain committed to further investment in this vibrant district.

Finance review

In 2013 EPRA NAV increased by 13.9% to £5.67, representing a net asset value return before payment of dividends of 16.3%. As anticipated, the increased level of redevelopment and refurbishment activity across the portfolio constrained growth in net rental income in the year. However, the benefits of the improved accommodation created by these schemes is now starting to deliver increased income.

EPRA profit after tax amounted to £30.2 million (2012: £30.6 million). EPRA EPS totalled 12.0p (2012: 12.2p).

results

Our rental income continued to rise during the year, with rents receivable increasing by £2.5 million to £83.5 million (2012: £81.0 million), of which acquisitions contributed £1.1 million. Our two major schemes in Carnaby reduced income in the year compared to 2012 by £1.3 million. Excluding the impact of acquisitions and the temporary loss of income resulting from these two schemes, the like-for-like increase in rental income was 3.4%.

Property charges increased by 3.0% to £10.3 million (2012: £10.0 million) partly as a result of the increased level of space being held vacant for redevelopment and refurbishment. After property charges, net property income increased by 3.1% to £73.2 million (2012: £71.0 million).

Administrative costs, excluding the annual bonus provision and the charge for equity-settled remuneration, were £7.5 million (2012: £7.2 million). The cost attributable to equity-settled remuneration increased by £1.1 million to £2.7 million (2012: £1.6 million) and included a non-cash accounting provision in respect of share options of £2.2 million (2012: £1.2 million) and a charge for employer's national insurance of £0.5 million (2012: £0.4 million). These increases arose principally as a consequence of the continued good performance from our portfolio, which increased the actual and forecast vesting of the NAV element of our share options. The provision for annual bonuses has increased this year by £0.2 million to £1.4 million (2012: £1.2 million), mainly as a result of an increase in headcount and higher salaries.

Acquisitions and capital expenditure increased our net debt during the year and so net finance costs (excluding the change in fair value of derivative financial instruments) increased by £1.4 million to £31.2 million (2012: £29.8 million). These costs were covered 1.97 times by operating profit before property valuation surpluses (2012: 2.05 times), comfortably in excess of the minimum of 1.5 times we are required to maintain under the terms of our debt facilities.

With long-dated sterling swap rates rising during the second half of the year, the fair value deficit attributable to our interest rate swaps fell £37.0 million to £95.8 million at 30 September 2013 (2012: £132.8 million). This accounting provision is excluded in the calculation of our banking covenants. The Board keeps the swaps position, and the impact our derivatives have in the long-term financing of the business, under review.

As a REIT, our activities are largely exempt from corporation tax. The Longmartin joint venture is not part of the REIT group and, therefore, its profits are subject to corporation tax. Our 50% share of its tax charge was £2.4 million (2012: £1.8 million) of which £2.2 million (2012: £1.2 million) related to deferred tax, mainly in respect of the revaluation of Longmartin's property. The current tax charge reduced by £0.4 million to £0.2 million (2012: £0.6 million), largely due to tax efficiencies as a result of raising debt in Longmartin in 2012.

DIVIDENDS

The Board has recommended a final dividend of 6.25p per share, up 3.3% on the 2012 final dividend 6.05p. This brings the total dividend for the year to 12.5p per share, an increase of 4.2% on 2012 (12.0p).

The total distribution in respect of the financial year will be £31.5 million. This compares with our EPRA profit after tax of £30.2 million, which, this year, has been reduced by the non-cash accounting charge for equity-settled remuneration of £2.2 million.

Our policy is to maintain steady growth in dividends to reflect the long-term trend in our income and EPRA earnings. In determining the level of the dividend, the Board has taken into account the short-term reduction in net property income growth as a result of our redevelopments and refurbishments, and the expected significant contribution these schemes will make to our rental income and earnings as they become fully income-producing in 2014 and 2015.

3.75p of the dividend will be paid as a PID, with the balance as an ordinary dividend.

NET ASSET VALUE

EPRA net assets increased over the year by £176.5 million (14.0%) to £1,435.6 million (2012: £1,259.1 million), resulting in an increase in EPRA NAV per share of 69p per share (13.9%) from £4.98 to £5.67. The increase comprises EPRA earnings for the year of 12.0p per share and the property revaluation surplus, equating to 69p per share. These amounts were offset by dividends paid totalling 12.3p per share.

CASH FLOWS AND DEBT

Cash flow from operating activities net of interest and tax payments was £31.3 million (2012: £30.3 million), funding dividend payments totalling £30.9 million (2012: £29.3 million). Net debt increased by £48.1 million to £604.9 million (2012: £556.8 million), as a result of acquisitions of £28.1 million and capital expenditure totalling £20.7 million.

DEBT SUMMARY (INCLUDING OUR 50% SHARE OF LONGMARTIN DEBT)

*based on nominal value of debt †measured against EPRA net assets

At 30 September 2013, we had long-term fixed rate borrowings of £121.0 million (2012: £121.0 million) and committed variable rate bank facilities totalling £575.0 million (2012: £575.0 million), of which £484.2 million were drawn (2012: £435.7 million). Gearing, measured against EPRA net assets, was 42.1% (2012: 44.2%) and our loan-to-value ratio was 29.5% (2012: 30.5%). We had available undrawn facilities totalling £90.8 million (2012: £139.3 million).

Taking into account interest rate swaps on £360 million of floating rate borrowings, 79.5% of our drawn debt was fixed at the year end (2012: 86.4%). During the year, we drew down on our unhedged variable rate bank facilities, the cost of which was considerably cheaper than that of our fixed and hedged debt. Consequently, the weighted average cost of debt, including non-utilisation fees for undrawn facilities, reduced from 5.43% to 5.07%. Our existing bank facilities, which were negotiated prior to the 2007-2009 banking crisis, are at margins considerably below the terms which could be obtained in today's market. At 30 September 2013, the average margin over LIBOR on our bank facilities was 0.91% (2012: 0.88%). This would rise to 1.04% if all our facilities were fully drawn. The marginal cost of new borrowings was around 1.80% (2012: 1.70%).

The weighted average maturity of our debt was 5.8 years (2012: 6.8 years). The Board regularly reviews the capital structure of our Balance Sheet, future funding requirements, debt levels, maturities and hedging exposures. As our investment strategy is long-term, our policy is to ensure our funding is long-term in nature, with a large proportion of our funding being fixed or having interest rate hedging. To avoid refinancing risk, our intention is to extend our maturities and secure long-term sources of finance well in advance of the contractual maturity of our current facilities. New arrangements are likely to be more expensive than those they replace.

We are now addressing the £375 million of our bank facilities which are due to mature in 2016. We expect to refinance £225 million of these arrangements in the coming months. The refinancing, if completed, will strengthen our financial base by improving the maturity profile of our debt and diversifying our sources of finance. As part of this, we currently expect to terminate a proportion of our interest rate swaps which, based on the year end mark-to-market valuation, would crystallise approximately £28 million of the deficit, equivalent to a reduction of 11p in EPRA NAV per share.

SECURITY AND COVENANTS

The providers of our bank facilities and interest rate swaps, and the holders of our Debenture Stock, have the benefit of fixed charges over specific assets, and floating charges over all the assets of Shaftesbury PLC and certain of its subsidiaries. The financial covenants in our banking agreements are structured on a Group-wide basis and are broadly similar for each facility.

The term loan in our Longmartin joint venture is secured by way of a fixed charge over its property and certain of its other assets and a floating charge over the remainder of its assets. There is no recourse to either of the joint venture shareholders.

Actual and forecast performance against loan covenants are reviewed by the Board at least quarterly. We continue to operate with significant headroom over the covenant limits set out in our loan agreements.

LOOKING AHEAD

London's stature as one of the world's leading global cities continues to grow as it becomes an ever-more popular destination for visitors and businesses, and as a place to live. The West End and our central locations are clearly benefiting from London's dynamism and growing global reputation.

Following the successful staging of the 2012 Olympics and Paralympics, which showcased London across the world, there has been a noticeable increase in domestic and international visitors throughout the year. Coupled with a gradual recovery in consumer confidence in the UK and abroad, visitor spending is increasing, encouraging retailers, restaurateurs and other leisure-related businesses to establish new ventures, particularly in and around the West End.

London has an exceptionally large and growing business community, attracting both major global organisations and UK-based corporations. The West End, with its long history of culture and creativity, has a particular concentration of fashion, media and IT businesses, bringing a young, creative and affluent local working population to our areas.

The growth of London's broad-based economy, together with a rapidly rising population, is stimulating major public and private investment in transport and essential infrastructure, as well as commercial and residential development. Demand across all our locations, and for all our uses, has been strong throughout the year and shows no sign of abating. Our vacancy levels are low, space lets quickly and rental income and values are steadily rising, leading to improved capital values. With strong demand and growing international interest in our shops and restaurants, we constantly seek opportunities to bring new concepts and operators to our villages.

This year, growth in our income and revenue profit has been tempered by the increased amount of redevelopment and refurbishment activity across the portfolio, particularly in Carnaby. The first of the two important schemes in Foubert's Place is now substantially let and, together with a number of other schemes in the portfolio, is now making an important contribution to the revenue growth we expect to see in the coming financial year.

It is unsurprising that, with clearly-evident prosperity and good long-term prospects for the West End, owners are naturally reluctant to sell so that opportunities to add to our portfolio are limited and their timing is difficult to predict. With our long experience of working in these areas, we maintain a focused and disciplined approach. The main driver of growth in our business continues to be the long-term potential in the £2 billion portfolio of over 560 buildings we already own.

We have always believed that, for the stability of our business, our long-term investment strategy must be supported with long-term finance, even though shorter-term arrangements may be available on cheaper terms. Although the maturity of bank facilities expiring in 2016 is over two years away, we are already in advanced discussions to extend maturities and introduce new long-term sources of finance. The security and stability of our locations and assets are particularly attractive to providers of long-term finance.

Our business is run by a small, highly-committed team, which has an exceptionally long experience of working in the West End property market as well as the local community. 2014 will see us move our office to Ganton Street in Carnaby, providing us with a modern working environment in the heart of our largest village. We are well-supported by an extensive network of advisors across a wide range of professional disciplines. Their contribution to the progress of our business is greatly valued.

The exceptional qualities of our unique portfolio, located in the centre of one of the world's most exciting, dynamic and prosperous cities, have again been demonstrated this year in the growth in our income and capital values. With our unrivalled knowledge of the areas in which we invest, and our innovative approach to managing our assets, we are confident that, as our business grows, we will continue to deliver good returns to shareholders in the years ahead.

Portfolio analysis/basis of valuation

PORTFOLIO ANALYSIS

BASIS OF VALUATION

Notes

1. The fair values at 30 September 2013 (the "valuation date") shown in respect of the individual villages are, in each case, the aggregate of the fair values of several different property interests located within close proximity which, for the purpose of this analysis, are combined to create each village. The different interests within each village were not valued as a single lot.

2. Current income includes total actual and 'estimated income' reserved by leases. No rent is attributed to leases which were subject to rent-free periods at the valuation date. Current income does not reflect any ground rents, head rents or rent charges and estimated irrecoverable outgoings at the valuation date. 'Estimated income' refers to gross estimated rental values in respect of rent reviews outstanding at the valuation date and, where appropriate, ERV in respect of lease renewals outstanding at the valuation date where the fair value reflects terms for a renewed lease.

3. ERV is the respective valuers' opinion of the rental value of the properties, or parts thereof, reflecting the terms of the relevant leases or, if appropriate, reflecting the fact that certain of the properties, or parts thereof, have been valued on the basis of vacant possession and the assumed grant of a new lease. Where appropriate, ERV assumes completion of developments which are reflected in the valuations. ERV does not reflect any ground rents, head rents or rent charges and estimated irrecoverable outgoings.

4. The percentage of current income and the percentage of ERV in each of the use sectors are expressed as a percentage of total income and total ERV for each village.

5. Average unexpired lease length has been calculated by weighting the leases in terms of current rent reserved under the relevant leases and, where relevant, by reference to tenants' options to determine leases in advance of expiry through effluxion of time.

6. Where mixed uses occur within single leases, for the purpose of this analysis, the majority use by rental value has been adopted.

7. The initial yield is the net initial income at the valuation date expressed as a percentage of the gross valuation. Yields reflect net income after deduction of any ground rents, head rents and rent charges and estimated irrecoverable outgoings at the valuation date.

8. The initial yield ignoring contractual rent free periods has been calculated as if the contracted rent is payable from the valuation date and as if any future stepped rental uplifts under leases had occurred.

9. Equivalent yield is the internal rate of return, being the discount rate which needs to be applied to the expected flow of income so that the total amount of income so discounted at this rate equals the capital outlay at values current at the valuation date. The equivalent yield shown for each village has been calculated by merging together the cash flows and fair values of each of the different interests within each village and represents the average equivalent yield attributable to each village from this approach.

10. The tone of rental values and yields is the range of rental values or yields attributed to the majority of the properties.

11. All commercial floor areas are net lettable. All residential floor areas are gross internal.

12. For presentation purposes some percentages have been rounded to the nearest integer.

13. The analysis includes accommodation which is awaiting or undergoing refurbishment or development and is not available for occupation at the date of valuation.

Group Statement of Comprehensive Income

For the year ended 30 September 2013

The notes below form an integral part of this Group financial information.

Balance Sheets

As at 30 September 2013

The notes below form an integral part of this Group financial information.

Group Cash Flow Statement

For the year ended 30 September 2013

The notes below form an integral part of this Group financial information.

Statements of changes in shareholders' equity

For the year ended 30 September 2013

The notes below form an integral part of this Group financial information.

Notes to the financial statements

For the year ended 30 September 2013

1. BASIS OF PREPARATION

The preliminary announcement does not constitute full financial statements.

The results for the year ended 30 September 2013 included in this preliminary announcement are extracted from the audited financial statements for the year ended 30 September 2013 which were approved by the directors on 27 November 2013. The auditors' report on those financial statements was unqualified and did not include a statement under Section 498(2) or 498(3) of the 2006 Companies Act.

The 2013 Annual Report is expected to be posted to shareholders on 17 December 2013 and will be considered at the Annual General Meeting to be held on 7 February 2013. The financial statements for the year ended 30 September 2013 have not yet been delivered to the Registrar of Companies.

The auditors' report on the financial statements for the year ended 30 September 2012 was unqualified and did not include a statement under Section 498(2) or 498(3) of the 2006 Companies Act. The financial statements for the year ended 30 September 2012 have been delivered to the Registrar of Companies.

2. SEGMENTAL INFORMATION

The chief operating decision maker has been identified as the Board, which is responsible for reviewing the Group's internal reporting in order to assess performance and the allocation of resources.

The Group's properties, which are all located in London's West End, are managed as a single portfolio. Its properties, which are of similar type, are combined into villages. All of the villages are geographically close to each other and have similar economic features and risks.

For the purposes of IFRS 8, each village is considered to be a separate operating segment. However, in view of the similar characteristics of each village, and the reporting of all investment, income and expenditure to the Board at an overall Group level, the aggregation criteria set out in IFRS 8 have been applied to give one reportable operating segment.

The Board assesses the performance of the reportable operating segment using measures of net property income and investment property valuation. All financial information provided to the Board is prepared on a basis consistent with these financial statements and, as the Group has only one reportable segment, the measures used in assessing the business are set out in the Group Statement of Comprehensive Income.

3. REVENUE FROM PROPERTIES

Rents receivable includes lease incentives recognised of £1.3 million (2012: £1.5 million).

4. PROPERTY CHARGES

5. NET PROPERTY INCOME

6. CHARGE IN RESPECT OF EQUITY SETTLED REMUNERATION

7. FINANCE COSTS

8. TAXATION

The reconciliation of the prior year tax charge has been restated to reflect a consistent presentation with the current year analysis. This has no impact on the prior year tax charge, the reported results and net assets in either year.

The Group's wholly owned business is subject to taxation as a REIT. Under the REIT regime, income from its rental business (calculated by reference to tax rather than accounting rules) and chargeable gains from the sale of its investment properties are exempt from corporation tax.

The Longmartin joint venture is outside the REIT group and is subject to corporation tax.

9. EARNINGS PER SHARE

The calculations below are in accordance with the EPRA Best Practice Recommendations.

The difference between the weighted average and diluted average number of ordinary shares arises from the potentially dilutive effect of outstanding options granted over ordinary shares.

10. DIVIDENDS PAID

The final dividend was approved by the Board on 27 November 2013. Subject to approval by shareholders at the 2014 AGM, the final dividend will be paid on 14 February 2014 to shareholders on the register at 24 January 2014. 3.75p of the total distribution of 6.25p per share will be paid as a PID under the UK REIT regime and 2.50p will be paid as an ordinary dividend. The dividend totalling £15.8 million will be accounted for as an appropriation of revenue reserves in the year ending 30 September 2014.

11. INVESTMENT PROPERTIES

Investment properties were subject to external valuation as at 30 September 2013 by qualified professional valuers, being members of the Royal Institution of Chartered Surveyors, either working for DTZ Debenham Tie Leung Limited, Chartered Surveyors (in respect of the Group's wholly owned portfolio) or Knight Frank LLP, Chartered Surveyors (in respect of properties owned by Longmartin Properties Limited), both firms acting in the capacity of External Valuers. All such properties were valued on the basis of fair value in accordance with the RICS Valuation Standards - Professional Standards 2012.

CAPITAL COMMITMENTS

*Group's share.

12. LEASE INCENTIVES

The unamortised amount of lease incentives is allocated between amounts to be charged against rental income within one year of the Balance Sheet date and amounts which will be charged against rental income in subsequent periods.

13. TRADE AND OTHER RECEIVABLES

Amounts due from tenants at each year end included amounts contractually due and invoiced on 29 September in respect of rents and service charge contributions in advance for the period 29 September to 24 December. As of 30 September 2013, amounts due from tenants which were more than 90 days overdue, relating to accommodation and services provided up to 28 September 2013, totalled £1.2 million (2012: £1.4 million) and are considered to be past due. Provisions against these overdue amounts totalled £0.4 million (2012: £0.3 million).

At 30 September 2013, cash deposits totalling £13.7 million (2012: £11.0 million) were held against tenants' rent payment obligations. The deposits are held in bank accounts administered by the Group's managing agents.

14. CASH AND CASH EQUIVALENTS

Cash balances at 30 September 2013 included amounts of £4.2 million (2012: £4.2 million), which are held in accounts or on deposit that have certain conditions that restrict the use of these monies. Holding cash in restricted accounts does not prevent the Group from earning returns by placing these monies in interest bearing accounts or on deposit.

15. TRADE AND OTHER PAYABLES

16. BORROWINGS

Net debt

The Group's head lease obligations represent its share of the net present value of amounts payable under leases with unexpired terms of 167 years held by Longmartin Properties Limited.

AVAILABILITY AND MATURITY OF GROUP BORROWINGS

INTEREST RATE PROFILE OF INTEREST BEARING BORROWINGS

The Group also incurs non-utilisation fees on undrawn facilities. At 30 September 2013, the weighted average charge on the undrawn facilities of £90.8 million (2012: £139.3 million) was 0.52% (2012: 0.54%).

At 30 September 2013, the weighted average credit margin on the Group's current bank facilities was:

The Group has in place interest rate swaps to hedge £360.0 million of floating rate bank debt, at fixed rates in the range 4.59% to 5.15%, with a weighted average rate at 30 September 2013 of 4.87%. The swaps, which are settled against three month LIBOR, expire between December 2027 and November 2038. The weighted average term is 19.4 years (2012: 20.4 years). If mutual break or early termination options are exercised the weighted average term is 4.2 years (2012: 5.2 years).

17. FINANCIAL INSTRUMENTS

FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS

Changes in the fair value of the Group's interest rate swaps, which are not held for speculative purposes, are reflected in the Statement of Comprehensive Income as the Group has chosen not to adopt hedge accounting under the provisions of IAS 39 (Financial Instruments: Recognition and Measurement).

The 8.5% Mortgage Debenture Stock 2024 and the Group's share of its joint venture's 4.43% secured term loan are held at amortised cost in the Balance Sheet. The fair value of liability in excess of book value which is not recognised in the reported results for the year is £14.0 million (2012: £18.5 million). The fair values have been calculated based on a discounted cash flow model using the relevant reference gilt and appropriate market spread.

The Group is not obliged to redeem the £61.0 million (nominal) of Debenture Stock in issue in advance of its redemption date of 31 March 2024, when repayment will be at par value. The Company also has no obligation to repay its share of the secured term loan in advance of its maturity on 21 December 2026.

The Group's interest rate swaps are fair valued by J.C. Rathbone Associates Limited, using the following fair value hierarchy:

Other financial instruments

The fair values of the Group's and Company's cash and cash equivalents, trade and other receivables, interest bearing borrowings (other than the 8.5% Mortgage Debenture Stock 2024 and its share of the secured term loan), head leases and trade and other payables are not materially different from the values at which they are carried in the financial statements.

18. DEFERRED TAX LIABILITIES