14th Feb 2008 07:00
Shaftesbury PLC14 February 2008 Interim Management Statement 14 February 2008 Shaftesbury PLC, the specialist West End property investment group, has today 14February 2008, released the following Interim Management Statement in respect ofthe period 1 October 2007 to 31 January 2008: Against the current background of financial uncertainty, we continue toexperience robust occupier demand in each of our villages and across all uses. Trading in the West End, which underpins this demand, has remained buoyantthroughout the Christmas and New Year period, in contrast to more subduedconditions reported throughout the UK generally. The volume and spending ofoverseas visitors is an important factor in the resilience of our local economy. Continuing strong demand throughout our portfolio is reflected in increasingrental levels. Many of our new lettings since the beginning of the financialyear have been at levels of rent in excess of our valuers' estimated rentalvalues assumed in their September 2007 valuations. Our vacant space across our portfolio remains at historically low levels. Inorder to satisfy demand in our villages, we are taking opportunities to securevacant possession of shops and restaurants which we expect to re-let withminimal delay at higher rents. Although this may lead to short term disruptionto our income, it allows us to introduce new trading concepts to our villagesand creates new rental evidence across our estates. In addition, tenantrelocation is unlocking a number of interesting opportunities to reconfigure orredevelop some of our buildings. We have considerable experience of actively encouraging and securing new retailand leisure ventures for our villages. Although we are conscious that any futuredeterioration in trading conditions could lead to an increase in tenantfailures, we believe our properties, which are located in some the most popularparts of the West End, will continue to attract demand. Although property yields are rising, resulting in falling values generally,investor appetite for freeholds in London's West End remains healthy and supplyis always limited. Despite current unsettled conditions, recent transactionsindicate that the values of well located shops and restaurants in our chosenareas of the West End have not fallen as much as has been reported forinvestments in other locations and sectors. In the four months to 31 January 2008, we have bought new investments at a totalcost of £16.2 million. These include seven freeholds around Seven Dials inCovent Garden. Whilst supply remains limited, we are considering a number ofother interesting opportunities but we remain very selective in what we buy. At our Longmartin Joint Venture in Covent Garden, we received further planningconsents in December 2007 and now have just one application outstanding.Preliminary works have started and Westminster City Council has commencedenvironmental and street improvements to Long Acre and St. Martin's Cross at thejunction with St. Martin's Lane. Already, we have encouraging interest fromprospective tenants for the first three Long Acre shops within the scheme, whichwe expect will be available by June 2008. We expect these new lettings willestablish new rental evidence in this location Finance Financial markets remain turbulent but short term interest rates have moderatedsince early January. In December and January we carried out a restructuring of anumber of our interest rate hedging arrangements, to take advantage ofattractive long term interest rate expectations and to reduce our exposure toadverse interest rate movements. We have consolidated a number of fixed ratehedges and cap/collar arrangements into two hedges on a notional principal totalof £220 million at a fixed rate of 5.1535% for a period of 20 years. Following this restructuring, together with new hedging undertaken during theperiod, we now have contracted fixed rate hedging in place on a total of £340million of our bank borrowings at a weighted average rate of 5.2% (equivalent toan all-in cost including margin of 5.88%) for a weighted average term of 15years. Prospects The general economic outlook remains uncertain which is being reflected in amarket-wide reassessment of property yields. Our portfolio cannot be immune fromthis general sentiment. However, we have not experienced any weakening inoccupier demand for our properties since the year end and we continuing tosecure rental growth throughout our portfolio. Underpinned by the currentstrength of the economy in London's West End, we believe the prospects for ourportfolio remain encouraging. For further information please contact:Shaftesbury PLC - 020 7333 8118Jonathan S Lane - Chief ExecutiveBrian Bickell - Finance Director City Profile - 020 7448 3244Simon CourtenayWilliam Attwell Ends.-------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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