Half Yearly Report

SHAFTESBURY ANNOUNCES 2013 HALF YEAR RESULTS

CONTINUED STRONG TENANT DEMAND AND PORTFOLIO GROWTH. FURTHER GROWTH IN DIVIDENDS AND NET ASSET VALUE

Shaftesbury PLC ("Shaftesbury") today announces its results for the 6 months ended 31 March 2013. Shaftesbury owns 13 acres in London's West End comprising over 500 properties in and around Carnaby, Covent Garden, Chinatown, Soho and Charlotte Street.

Results and dividends

Net asset value and portfolio performance 

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

Results

·; Unusually high level of development and refurbishment activity has tempered growth in the short term in net property income and profit before tax; ERV of all schemes currently underway £6.2 million

·; Annualised current income at 31.3.2013: £82.8 million (30.9.2012: £80.9 million)

·; Portfolio capital value return over six months ended 31.3.2013: +3.4% (IPD Monthly Index: -1.7%). (Year to 31.3.2013: Shaftesbury +7.5%; IPD Monthly Index -4.0%)

·; Net asset value return for six months ended 31.3.2013: 6.2% (Year to 31.3.2013: 13.8%)

Portfolio activity

·; Continuing good demand across all villages and for all uses:

- Low level of vacancy - available commercial space 2.8% of ERV of which 1.1% was under offer

- Lettings and lease renewals of £5.5 million in period - average 3.1% above ERV

- Like-for-like ERV growth of 2.0% during six month period (growth 4.3% over year to 31.3.2013)

- Portfolio reversion now stands at £19.7 million, increased by 3.7% over the period

·; Schemes progressing well:

- Lasenby House scheme completed in May; two new shops under offer and considerable interest in remaining unit

- Redevelopment of buildings on south side of Foubert's Place and Kingly Street adding 18,000 sq. ft. now on site. Completion by end 2014

- All schemes letting quickly - exceptional demand for new restaurant space

·; Continuing to identify valuable new schemes within existing portfolio

·; Acquisitions totalling £12.4 million in period include two restaurants in Covent Garden and a shop in Soho. Limited availability of potential acquisitions which meet our strict criteria.

Finance

·; Committed unutilised bank facilities at 31.3.2013: £120.6 million

·; Conservative gearing (Loan-to-value ratio 31.3.2013: 30.1%)

·; Earliest facility maturities 2016

Brian Bickell, Chief Executive, commented:

"London continues to benefit from its unique features and unrivalled variety of attractions which draw visitors, businesses and those who wish to live here. Its status as a global destination brings world-wide interest, leading to prosperity and stability which is not reliant on the wider UK economy.

As we anticipated, growth in our rental income is tempered this year as a result of the unusually high level of refurbishment and development activity across our portfolio. With sustained good demand across all our uses, we expect these valuable projects will let well on completion and make an important contribution to our revenue growth. We continue to identify and progress other valuable schemes within our portfolio.

With a strong and resilient local economy, and our long established and proven management strategies, we are confident in the prospects for sustained income and capital growth from our unique and centrally-located portfolio in the years ahead. "

22 May 2013

For further information:

There will be a presentation to equity analysts at 10.30 am on Wednesday 22 May 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 24481397#. 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 13 acres of freeholds, now includes 329 shops and 233 restaurants, bars and cafes, which together account for 72% of its current income. The 391,000 sq. ft. of offices and 449 apartments in the wholly-owned portfolio provide 16% and 12% 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 results.

business review

London continues to benefit from its unique features and unrivalled variety of attractions which draw visitors, businesses and those who wish to live here. Its status as a global destination brings world-wide interest, leading to prosperity and stability which is not reliant on the wider UK economy.

In the West End, trends in domestic and overseas visits and spending continue to be positive. This underpins continuing strong demand for shops, restaurants and leisure space; together these generate 71% of our rental income. Furthermore, with good levels of interest from office occupiers seeking to locate or expand within the West End, overall commercial occupancy levels in our villages are high and rental values continue to grow. Demand to rent our apartments remains equally healthy.

EPRA adjusted profit before tax for the six months ended 31 March 2013 amounted to £15.2 million compared with £16.1 million in the same period last year. As we advised in our 2012 Annual Report, we are now progressing with a number of important refurbishment and development projects, including our major schemes in Carnaby. The combined ERV of schemes currently in hand, including residential projects, is £6.2 million. As we anticipated, this unusually high level of activity is tempering the growth in our net property income.

In the six months ended 31 March 2013, we have concluded new lettings and lease renewals of commercial space across the portfolio totalling £5.5 million, with rents achieving on average 3.1% above ERV. New lettings have introduced interesting retail and restaurant operators to our villages. Our important large schemes in Carnaby have progressed as expected. The project on the north side of Foubert's Place completed in May 2013. Two of the new shops are under offer and we have strong interest in the remaining shop from international retailers.

EPRA adjusted diluted net asset value per share at 31 March 2013 stood at £5.23, representing a net asset value return of 6.2% over the period and 13.8% over the past twelve months.

Interim dividend

Your directors are pleased to declare an interim dividend of 6.25p per share, an increase of 5.0% on last year's interim dividend of 5.95p. The interim dividend, which will be paid on 5 July 2013, will be a Property Income Distribution (PID).

Our policy is to maintain steady growth in dividends to reflect the long-term trend in our income and EPRA adjusted earnings. In determining the level of the interim dividend, the Board has taken into account the short-term impact on revenue in the current financial year from the high level of refurbishment and redevelopment activity currently in progress. These schemes will make a significant contribution to our earnings as they start to become income-producing.

Portfolio performance

Our portfolio has been valued at 31 March 2013 at £1,913.1 million, producing a surplus on revaluation of £62.0 million.The ungeared capital value return for the six months ended 31 March 2013 was 3.4%. This compares with a decline of1.7% reported by the IPD Monthly Index over the same period. Our portfolio delivered a total return of 5.4% during the period (IPD Monthly Index: 1.6%).

Our strategy is to deliver sustained growth in rental income which is the fundamental driver of long-term growth in property values. With good levels of demand for all uses and continued high occupancy, both current income and ERV have grown in the period.

At 31 March 2013, the annualised current income generated by our portfolio amounted to £82.8 million, a net increase of £1.9 million or 2.3% over the period. The like-for-like increase in annualised current income over six months was 2.7%. Vacating further space in connection with the two major Carnaby schemes reduced the total by £0.5 million whilst acquisitions added £0.3 million.

The ERV of our portfolio increased by £2.6 million to £102.5 million over the period, of which acquisitions contributed £0.6 million. The like-for-like growth in total ERV was 2.0%.

The reversionary potential of the portfolio stands at £19.7 million, 23.8% higher than the annualised current income. Of the total, £18.2 million is attributable to the wholly-owned portfolio and £1.5 million to the Longmartin joint venture. £4.2 million of the total reversion had been contracted at 31 March 2013 and will be delivered through the expiry of rent-free periods and pre-agreed increases in rents. The ERV of all vacant commercial and residential space amounted to £8.9 million.

£6.6 million of our portfolio's reversion arises from the potential additional income we should receive as our rents increase to the current market levels estimated by our valuers. Retail, restaurant and leisure uses make up £5.3 million, or 80%, of this total. Demand for these uses in our locations has historically been high and availability is generally restricted by planning policies. As a result, in our experience, their rental levels are not cyclical and we are confident that this potential additional income will crystallise through the normal cycle of rent reviews, lease renewals and new lettings. At the same time we seek to continue to deliver additional long-term growth in rental levels through our management strategies.

Valuation

Capital value growth of 3.4% was driven by like-for-like ERV growth of 2.0%, combined with yield compression over the period of eight basis points in the wholly-owned portfolio and six basis points in the Longmartin joint venture. Over the past twelve months like-for-like ERV growth was 4.3% and there has been yield compression of 21 basis points in the wholly-owned portfolio and 12 basis points in the Longmartin joint venture.

Our unique wholly-owned portfolio, which now extends to 13 acres of freeholds across over 500 buildings, is largely concentrated in a number of well-known shopping and restaurant villages in the heart of the West End. All are within walking distance of London's many historic, cultural and leisure attractions. Our wholly-owned villages are notable for their varied uses, dominated by 329 shops, 233 restaurants and 449 apartments, which together provide 84% of our current income.

*Group's 50% share

These uses have a history of sustained demand and restricted availability which underpins their rental growth prospects.The concentration of our investments enables the benefits of improving individual properties to be compounded acrossour adjacent ownerships.

DTZ, independent valuers of our wholly-owned portfolio, have prepared their valuations in accordance with RICS Valuation Professional Standards. Significantly, they continue to advise the Board that some prospective purchasers, recognising the exceptional characteristics of our portfolio, could consider parts of it, when combined, to have higher aggregate values than recognised in the valuation we adopt in our financial statements.

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

Acquisitions

We are very selective in what we buy, remaining patient but determined to acquire buildings which we believe enhance our portfolio. We apply strict criteria when assessing the potential long-term benefits of ownership. We continue to focus on properties which have, or have the potential for, principally retail and leisure uses, which complement our existing ownerships, and where we believe we will deliver long-term growth in income and capital values. Often we acquire unmodernised properties with vacant possession, or with short-term leases, allowing us quickly to implement our plans to improve space and increase income.

The West End continues to offer exceptional security and prosperity for both UK and international investors, and these wealth-preservation qualities are more important than ever to existing owners. Consequently, the supply of investment opportunities which meet our demanding criteria remains low. Equally, where properties are offered for sale, there is always interest from other bidders, attracted by the potential rewards investment in the West End can offer.

Acquisitions in the first half totalled £12.4 million, of which £9.5 million was in Covent Garden and £2.9 million was in Soho. They comprised two restaurants extending to 7,900 sq. ft., three shops (2,700 sq. ft.) and offices totalling 1,700 sq. ft. on upper floors.

Demand and occupancy

Demand for all uses across each location has been strong throughout the period, and remains so. Consequently, occupancy levels across the portfolio have remained high.

As a result of our major schemes in Carnaby, we currently have an unusually high level of space held for, or undergoing, development or refurbishment. At 31 March 2013, the ERV of the commercial elements of all such schemes in the wholly-owned portfolio amounted to £4.7 million, equivalent to 5.6% of total commercial ERV.

Both our major schemes in Carnaby were underway at 31 March 2013. Demolition of buildings on the south side of Foubert's Place and on Kingly Street commenced in January 2013 and the development is expected to be completed by the end of 2014. The scheme on the north side of Foubert's Place completed in May 2013. The commercial accommodation being created in these two schemes has a total ERV of £2.5 million. In addition, the residential element will contribute £0.4 million.

The ERV of other commercial space in the wholly-owned portfolio that was held for or under refurbishment increased over the first half by £0.4 million to £2.2 million. Of the four restaurants (ERV £0.8 million), three (ERV £0.6 million) are already under offer or pre-let. Commercial space in our wholly-owned portfolio, with an ERV of £2.3 million, representing 2.8% of commercial ERV, was ready and available to let. Of this total, £0.9 million was under offer, including five restaurants and cafes (£0.4 million). Five large shops (rental value over £100,000) were available, two of which are now let (ERV £0.3 million) and one is under offer (ERV £0.1 million).

We have a number of future redevelopment projects in the pipeline and continue to unlock new opportunities from within our existing portfolio to take back leases where we can refresh tenant mix, reconfigure space and accelerate rental growth. These initiatives will result in short-term loss of income and increases in vacancy levels.

Of our 449 wholly-owned apartments, 57 (ERV £1.5 million) were being refurbished or were under construction.We expect 38 of these (ERV £0.9 million) to be completed and let in the second half of the year. There were only twelve apartments available to let at 31 March 2013 (ERV £0.2 million), reflecting the good level of occupancy we have seen throughout the year.

In the Longmartin joint venture, available commercial space comprised one office (3,100 sq. ft.) and one shop, which was under offer. 2,600 sq. ft. of offices and two apartments were being refurbished. The Group's share of vacant space amounted to £0.2 million.

Carnaby

Valuation £637.4mAcquisitions during the period £nilCapital expenditure during the period £4.2mCapital value return during the period 3.8%

Carnaby's long-established reputation for fashion continues to draw growing numbers of shoppers as well as attracting innovative retailers seeking to locate in this unique retail destination in the heart of the West End. In addition, the village's increasing choice of interesting casual dining is adding to its lively character and making it a vibrant leisure destination in its own right.

In today's media-dominated world, styles, tastes and new ideas evolve at an ever-faster pace. We continue actively to seek new retailers and concepts and, through our management strategies, encourage change to ensure our villages continue to appeal to fashion-conscious shoppers. Since 1 October 2012, we have been particularly active in Carnaby, introducing nine new retailers for UK flagship stores, new concepts, or their first UK store. The total rental value of these lettings was £1.7 million.

Two major schemes in Carnaby were underway during the period, which have a total ERV of £2.9 million, an increase of £2.0 million on pre-scheme rents. Our project on the north side of Foubert's Place has just finished. It has added 5,000 sq. ft. of retail space, to create three new large shops totalling 8,600 sq.ft. as well as reconfiguring existing retail space. Two of the new shops are now under offer to international fashion retailers and we have strong interest in the remaining unit from operators whom we are currently assessing.

The second scheme commenced in January 2013 and involves the complete redevelopment of buildings fronting both the south side of Foubert's Place and Kingly Street. The site previously provided 14,500 sq. ft. of lettable space and on completion, our enhanced project will provide a total of 32,500 sq. ft., including 7,500 sq. ft. of retail on Foubert's Place, a 6,500 sq. ft. restaurant on Kingly Street, 10,500 sq. ft. of offices, and twelve apartments. Completion is expected by the end of 2014 at an estimated cost of £13.5 million.

The part-pedestrianisation and re-paving of Kingly Street in 2011 has resulted in much greater footfall, drawn from Carnaby, Regent Street and surrounding areas, which have a high concentration of shops and offices. This street now offers a range of contemporary restaurant concepts, many with external seating, together with traditional pubs. This has created a bustling, cosmopolitan atmosphere.

In Kingly Court, which links Kingly Street to Carnaby Street, we have made good progress in broadening the courtyard's food and beverage mix. We have converted 3,400 sq. ft. of retail space to restaurant use which has been pre-let to a new all-day casual dining concept. We have also secured vacant possession of a number of units on the lower floors which will enable us to introduce new food-related retail to complement the developing character of this part of Carnaby.

Carnaby continues to be a popular location for office occupiers and occupancy levels remain high. Our 228,000 sq. ft. of office space is let to 134 tenants, many of whom are in the retail, media, creative and IT sectors. At 31 March 2013, we had 27,500 sq. ft. of space under refurbishment, of which 9,000 sq. ft. is under offer. The refurbishment of the remaining 18,500 sq. ft. is expected to be completed by the end of 2013. We expect to occupy 7,400 sq. ft. of this space ourselves next year when the lease on our current office accommodation expires in June 2014.

Covent Garden

Valuation £670.0m*Acquisitions during the period £9.5mCapital expenditure during the period £3.4m*Capital value return during the period 3.0%*

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

Our wholly-owned holdings in Covent Garden include the busy areas of Seven Dials, a mainly retail destination centred on Earlham Street, Monmouth Street and Neal Street, as well as the Opera Quarter (east of The Piazza) and Coliseum (close to Leicester Square), which are both important restaurant and leisure locations clustered around Covent Garden's theatres. In addition, the Longmartin joint venture, in which we have a 50% interest, owns a 1.9 acre island site at the junction of Long Acre and Upper St Martin's Lane, which includes St Martin's Courtyard. With an enviable concentration of retail, restaurant and leisure uses, these areas of Covent Garden are popular with visitors, office occupiers and a long-established and growing residential community.

Within our Covent Garden holdings, good demand continues for all uses. In Seven Dials we have introduced new brands appealing to a slightly older demographic with a higher average spend. We continue to see good interest from a wide variety of domestic and international retailers, and we have a number of initiatives in hand to refresh and reposition the retail mix.

Demand for restaurant accommodation across Covent Garden is considerable, and there is always strong interest from potential occupiers should we have vacant units or where leases are offered for assignment. This provides us with opportunities to introduce operators with new formats. A 4,500 sq. ft. restaurant and bar on a prominent corner at Cambridge Circus has been pre-let ahead of completion of works in July 2013. In February 2013, we completed the purchase of a vacant 5,100 sq. ft. unit on Upper St. Martin's Lane, opposite St Martin's Courtyard, and we are currently carrying out works to improve the configuration of the space.

Crossrail is spurring a number of important new private sector and infrastructure schemes in and around Tottenham Court Road which we expect will increase the importance of pedestrian routes through Seven Dials. In particular, plans are being developed for major improvements to Cambridge Circus, a very important but congested junction to the south of Tottenham Court Road station, which links pedestrian access to and from Soho, Chinatown and Seven Dials. A traffic management scheme on Earlham Street is being trialled by Camden Council and, if it becomes permanent, should bring forward public realm improvements which will connect with the remodelled Cambridge Circus.

St Martin's Courtyard, completed some two years ago, is now an established destination within Covent Garden. We expect to introduce some changes in the retail mix later this year to capitalise on the much-increased footfall now evident along the western end of Long Acre.

Chinatown

Valuation £423.2mAcquisitions during the period £nilCapital expenditure during the period £0.8mCapital value return during the period 2.5%

Chinatown, with its concentration of restaurant uses and reputation for a wide variety of Chinese and Asian cuisine, continues to flourish. The area's shopping also reflects its unique and distinctive character.

Restaurant space in this bustling and prosperous location is rarely vacant. However, in April 2013, we secured vacant possession of a 7,000 sq. ft. restaurant on Gerrard Street, and expect to secure a further 4,500 sq. ft. restaurant on Wardour Street later this year. In both cases, we will carry out works to reconfigure the buildings before marketing. In some instances, particularly with larger, older buildings, we can increase rental values on the upper floors by introducing new uses to replace inefficient and under-utilised restaurant space.

Improvements to the public realm, in partnership with Westminster City Council, remain an important part of our strategy, bringing long-term benefits. In March 2013, with our support, Westminster City Council introduced a new traffic management scheme to pedestrianise Lisle Street and the Chinatown section of Wardour Street from 12 noon each day. We are part-funding further improvements to these streets with re-paving expected to start in July 2013. These enhancements provide much-needed additional capacity for pedestrians who use these busy streets.

Immediately to the west of Chinatown, a new 580 bedroom "pod" hotel at the Trocadero has received planning consent. Once built, this will benefit our restaurants, particularly those on Rupert Street and in Rupert Court, bringing public realm improvements and increased footfall.

Soho

Valuation £129.6mAcquisitions during the period £2.9mCapital expenditure during the period £1.4mCapital value return during the period 6.1%

Our ownerships in Soho are presently focussed in and around Berwick Street, a long-established and busy route from Oxford Street in the north towards Leicester Square in the south. Recently we have acquired buildings on, and close to, Brewer Street and Old Compton Street, an important east-west route through Soho.

Although popular with visitors, business and residents, the area has, for many years, suffered from fragmented ownership and under-investment both in its building stock and the public realm, depressing rental values.

As we expected, new investment is now coming to the area. Crossrail is already stimulating a number of developments along the eastern end of Oxford Street. A new western entrance to Tottenham Court Road station on Dean Street will be a catalyst for improvements to the northern end of Berwick Street. Privately funded schemes are underway on Broadwick Street and the western end of Brewer Street, and projects are being progressed to improve Kemp House and Walker's Court at the south of Berwick Street.

Since 2008 we have assembled an ownership, which includes 59 shops and restaurants, in, and close to, Berwick Street, currently valued at £129.6 million. Many of the properties we have acquired have been in poor condition. Our restoration and reconfiguration schemes, introducing more valuable uses, have let well and have delivered good initial returns on our investment. In the longer term they will further benefit from new investment and regeneration coming into the area.

CHARLOTTE STREET

Valuation £52.9m Acquisitions during the period £nilCapital expenditure during the period £0.1mCapital value return during the period 5.4%

Charlotte Street is a popular and long-established restaurant quarter north of Oxford Street and a few minutes' walk from Tottenham Court Road.

Developments in the vicinity are attracting new businesses to the area as well as adding to its residential community.The Tottenham Court Road station works, part of the Crossrail project, will provide much improved public transport capacity close to Charlotte Street. The redevelopment of the Middlesex Hospital site is progressing and is due for completion in 2015. It will provide 220,000 sq. ft. of new office accommodation, 237 apartments, together with shops and a restaurant.

Plans have recently been announced for the redevelopment of the Royal Mail site on Rathbone Place which is expected to provide over 400,000 sq. ft. of mixed use space, including 142 apartments.

Each of these important projects will bring even more activity to this already lively location.

Results

EPRA adjusted pre-tax profit for the six months ended 31 March 2013 amounted to £15.2 million (31.3.2012: £16.1 million). EPRA adjusted EPS were 6.0p (31.3.2012: 6.3p).

The West End occupational market has continued to perform well throughout the period. Tenant demand across all uses, and in all our villages, has remained strong. As expected, the two large schemes in Carnaby, along with the general level of refurbishment and development, have tempered net property income growth over the period. These projects are improving the accommodation we can offer and will deliver increased income over the coming years.

Rents receivable increased by £0.9 million to £41.2 million compared with the first half of last year (31.3.2012: £40.3 million), with acquisitions adding £0.7 million and a like-for-like increase in gross rents receivable from the wholly-owned portfolio of 2.5%. The two major schemes in Carnaby reduced income in the first half of the current year compared to the same period in the prior year by £0.8 million. Longmartin delivered an additional £0.2 million.

After property charges of £5.3 million (31.3.2012: £4.8 million), net property income grew by £0.4 million (1.1%) to £35.9 million (31.3.2012: £35.5 million). Our development and refurbishment schemes, particularly in Carnaby, have resulted in higher property costs while space was held vacant before and during schemes; we do not capitalise these costs. The level of property charges in the first half of 2013 was broadly similar to the second half of 2012.

Administrative costs, excluding the charge for equity-settled remuneration, totalled £4.0 million (31.3.2012: £3.8 million) including a provision of £0.25 million for annual bonuses (31.3.2012: £0.5 million). Excluding annual bonus provisions, the level of administrative costs was also broadly similar to the second half of 2012.

The charge for equity-settled remuneration rose to £1.3 million (31.3.2012: £0.9 million) and includes an increased number of LTIP options expected to vest and an additional provision for national insurance, due, in part, to the rise in our share price over the period.

Net finance costs were £15.4 million (31.3.2012: £14.7 million) and were covered 2.0 times by operating profit before property revaluation surpluses (31.3.2012: 2.1 times), comfortably above the minimum 1.5 times we are required to maintain by our bank loan agreements. The increase reflects higher debt levels resulting from acquisitions and capital expenditure.

The non-cash provision for the fair value deficit of our interest rate swap contracts fell by £4.6 million to £128.2 million. The Group's hedging strategy is reviewed regularly by the Board and we continue to take the view that crystallising all or part of the deficit would not benefit the Group at present.

As a REIT, the Group's activities are largely exempt from corporation tax. However, the Longmartin joint venture is outside of our REIT group and, as such, is subject to tax. Our share of its tax charge for the six months ended 31 March 2013 was £1.0 million (31.3.2012: £0.3 million), of which £0.9 million (31.3.2012: £nil) was in respect of deferred tax on the revaluation of property and capital allowances.

Net asset value

EPRA adjusted net assets have increased by £62.7 million (5.0%) to £1,321.8 million since 30 September 2012. The increase was largely the result of property revaluation gains of £62.0 million.

EPRA adjusted diluted NAV per share rose 5.0% to £5.23 (30.9.2012: £4.98). This increase takes into account EPRA earnings for the period of 6.0p per share and the property revaluation surplus which contributed 24.6p per share. These amounts were offset by the payment of the 2012 final dividend of 6.05p per share.

Cash flows and debt

Cash generated from operating activities net of interest and tax payments was £19.2 million (31.3.2012: £17.0 million) funding dividend payments totalling £15.4 million (31.3.2012: £14.5 million). Borrowings increased by £18.7 million to £575.4 million over the first half, largely due to acquisitions of £12.6 million and capital expenditure of £9.1 million.

We drew down on our unhedged variable rate bank facilities during the period. These facilities are cheaper than our hedged debt and consequently the average cost of debt, including non-utilisation fees for undrawn facilities, reduced by fifteen basis points to 5.28% at 31 March 2013 (30.9.2012: 5.43%).

The marginal cost of new borrowings at 31 March 2013 was 1.65% (30.9.2012: 1.70%). The average margin on our variable-rate bank facilities at the end of March was 0.88% (30.9.2012: 0.88%) and this would rise to 1.04% if our facilities were fully drawn.

We had undrawn committed facilities totalling £120.6 million at 31 March 2013 (30.9.2012: £139.3 million). Group loan-to-value was 30.1% (30.9.2012: 30.5%) and gearing based on EPRA net assets was 43.5% (30.9.2012: 44.2%).

The average unexpired term of our debt was 6.3 years, with our earliest maturities in 2016. We are already in discussions with existing and potential lenders to extend or refinance part of the £375 million facilities which expire in 2016. Inevitably, in current market conditions, new arrangements will be more expensive than those they replace.

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

Board changes

John Manser retired as Chairman at the conclusion of the 2013 Annual General Meeting on 8 February 2013. He was succeeded as non-executive Chairman by Jonathan Lane, whose previous role as executive Deputy Chairman ceased.

Looking ahead

London's reputation as a global city grows ever stronger, attracting businesses and visitors from across the world. This is reflected in a growing population which is expected to increase by one million by 2026. The city continues to evolve in response to an ever-changing world so that today the media, creative and technology sectors are now the second largest contributors to its economy. The West End is home to many of these businesses.

The West End's unrivalled variety of attractions, which were showcased to the world during last year's Jubilee celebrations and the Olympics, continue to draw unprecedented numbers of Londoners and domestic and international visitors. Similarly the amenities available to those who work in the West End are an important factor when businesses choose to locate here.

The popularity of the West End presents particular challenges to its governance and infrastructure. The West End Commission's recent report, which has set out a number of proposals to better co-ordinate and fund aspects of local administration, is being debated in the coming months. Meanwhile, improvements in public transport are increasing capacity and reliability across a crowded network. Crossrail, which will materially improve access to the West End, is already bringing forward public realm improvements as well as encouraging private sector investment in and around our locations. All our holdings are within ten minutes' walk of either Bond Street or Tottenham Court Road stations, which are being rebuilt to provide for the new major Crossrail interchanges.

As we anticipated, growth in our rental income is tempered this year as a result of the unusually high level of refurbishment and development activity across our portfolio. With sustained good demand across all our uses, we expect these projects will let well on completion and make an important contribution to our revenue growth. We continue to identify and progress other valuable schemes within our portfolio.

With a strong and resilient local economy, and our long-established and proven management strategies, we are confident in the prospects for sustained income and capital growth from our unique and centrally-located portfolio in the years ahead.

Brian BickellChief Executive

Christopher WardFinance Director

22 May 2013

portfolio analysis

* Shaftesbury Group's share

basis of valuation

Notes

1. The Fair Values at 31 March 2013 (the "valuation date") shown above 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, estimated rental values 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. Consequently, the ERVs used in the valuation are a mixture of headline rents (with incentives) and effective rents (without incentives). 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. The ERV used in the valuation for Carnaby Street reflects £435 Zone A without an incentive. Rent free allowances of up to three months are standard periods for tenants to fit out premises and are not considered as incentives. Were tenants to receive three month incentives in addition to the standard three month allowance, rents of around £458 Zone A would be achievable. The equivalent ERVs at 30 September 2012 were £451/£429 Zone A.

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.

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. All floor areas are stated as existing at the valuation date.

12. For presentation purposes 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.

unaudited group statement of comprehensive income

for the six months ended 31 March 2013

The notes below form an integral part of the condensed consolidated half year financial statements.

unaudited group balance sheet

as at 31 March 2013

The notes below form an integral part of the condensed consolidated half year financial statements.

unaudited group cash flow statement

for the six months ended 31 March 2013

The notes below form an integral part of the condensed consolidated half year financial statements.

unaudited group statement of changes in shareholders' equity

for the six months ended 31 March 2013

The notes below form an integral part of the condensed consolidated half year financial statements.

notes to the half year results

for the six months ended 31 March 2013

1. GENERAL INFORMATION

The condensed consolidated half year financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 September 2012 were approved by the Board of directors on 29 November 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The condensed half year financial statements have been reviewed, not audited.

Basis of preparation

These half year financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting', as adopted by the European Union. They should be read in conjunction with the annual financial statements for the year ended 30 September 2012, which have been prepared in accordance with IFRSs as adopted by the European Union.

Going concern

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

Significant judgements, assumptions and estimates

The preparation of these financial statements requires the Board to make judgements, assumptions and estimates that affect amounts reported in the Statement of Comprehensive Income and Balance Sheet. Such decisions are made at the time the financial statements are prepared and adopted based on the best information available. Actual outcomes may be different from initial estimates and are reflected in the financial statements as soon as they become apparent.

The measurement of fair value constitutes a significant estimate by the Board in the preparation of these financial statements. The fair valuations of investment properties, derivative financial instruments and share options are carried out by external advisors whom the Board considers to be suitably qualified to carry out such valuations. In the case of share based payments, judgements are made by the directors regarding the future level of option vesting.

Certain statements in this Half Year Report are forward looking. Although the Group believes that the expectations reflected in these forward looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward looking statements.

The Group undertakes no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

2. ACCOUNTING POLICIES

CHANGES IN ACCOUNTING POLICIES

The accounting policies applied are consistent with those of the previous financial year.

NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

a) The following amendment to a standard is mandatory for the first time for the financial year beginning 1 October 2012:

No material changes to accounting policies arose as a result of this amendment.

b) The following amendment to a standard becoming effective in the year ending 30 September 2013 but not relevant to the Group:

c) Standards, amendments and interpretations relevant to the Group that are not yet effective in the year ending 30 September 2013 and not expected to have significant impact on the Group's financial statements:

d) The following new standard is relevant to the Group but not yet effective in the year ending 30 September 2013 and is expected to have a significant impact on the Group's financial statements:

The Group currently accounts for its joint venture using proportionate consolidation. Under IFRS 11, joint ventures must be accounted for on an equity basis. This will result in the Group recognising a single line item for the investment and its share of the joint venture's profit or loss. This change will not affect the Group's net assets or profit after tax.

3. Revenue from properties and segmental information

Rents receivable include lease incentives recognised of £0.6 million (31.3.2012: £1.2 million; 30.9.2012: £1.5 million).

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 a 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 half year 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.

4. Property charges

5. Net property income

6. Charge in respect of equity settled remuneration

7. Finance costs

8. Taxation

The wholly-owned Group is subject to taxation as a REIT; its property rental business (both income and capital gains) is exempt from taxation. The current tax charge of £0.1 million (31.3.2012: £0.3 million; 30.9.2012: £0.6 million) and the deferred tax charge of £0.9 million (31.3.2012: £Nil; 30.9.2012: £1.2 million) are the Group's share of its joint venture's tax charge, which is not part of the REIT group.

9. EARNINGS PER SHARE

The calculations below are in accordance with EPRA's 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

An interim dividend in respect of the six months ended 31 March 2013 of 6.25p per ordinary share was declared by the Board on 22 May 2013. The interim dividend will be paid entirely as a PID on 5 July 2013 to shareholders on the register at 14 June 2013. The dividend will be accounted for as an appropriation of revenue reserves in the year ending 30 September 2013.

11. Investment properties

Investment properties were subject to external valuation as at 31 March 2013 by qualified professional valuers, being members of the Royal Institution of Chartered Surveyors (RICS), 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.

The Fair Value of each of the properties has been primarily derived using comparable recent market transactions on an arm's length basis. There are a number of assumptions that are made in deriving the Fair Value including assessments of market yields and estimated income. The key assumptions are set out in the basis of valuation above.

Investment properties include freehold properties valued at £1,665.6 million, leasehold properties with an unexpired term of over 50 years valued at £144.7 million and a notional apportionment of value in respect of part freehold/part leasehold properties, where the apportionment in respect of the leasehold element with over 50 years unexpired is £102.8 million.

Capital commitments

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

At 31 March 2013, cash deposits totalling £12.3 million were held against tenants' rent payment obligations (31.3.2012: £10.4 million; 30.9.2012: £11.0 million).

14. Cash and cash equivalents

Cash balances at 31 March 2013 included amounts of £4.2 million (31.3.2012: £1.2 million; 30.9.2012: £4.2 million) which are held in accounts or on deposit that have certain conditions restricting 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

RECONCILIATION OF NET DEBT

AVAILABILITY AND MATURITY OF BORROWINGS 31 MARCH 2013

The expected maturity and availability of the Group's borrowings, based on nominal values are as follows:

MOVEMENT IN BORROWINGS DURING THE PERIOD