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Interim Management Statement

31st Jul 2008 07:00

RNS Number : 2280A

Shaftesbury PLC

31 July 2008

SHAFTESBURY PLC (the "Group")

INTERIM MANAGEMENT STATEMENT FOR THE PERIOD

1 APRIL 2008 TO 31 JULY 2008

Our strategy to invest only in the most vibrant areas of London's West End is proving very resilient. Recent statistics on West End retail sales, visitor numbers and theatre bookings all show continuing improvement, in contrast to well-publicised national trends of declining consumer confidence and spending.

We have continued to see healthy demand for retail, restaurant and residential accommodation across our villages in Carnaby, Covent Garden and Chinatown, in spite of deteriorating sentiment and the general spread of uncertainty across the entire economy. We are continuing to settle rents for these uses at or above the rental values assumed in our last half year valuations. However, in contrast, demand for offices, which provide 23% of our income, is moderating and vacancies are now increasing. We are continuing our long term strategy of converting offices to other uses wherever possible.

Transport for London and Westminster City Council have expanded their investment to improve the public realm and streets. Major projects are now underway in Shaftesbury Avenue, next to Chinatown, and in Long Acre, adjoining our St. Martin's Courtyard project and close to Seven Dials. Further schemes are being planned for Kingly Street in Carnaby and Leicester Square. We expect that these schemes will result in long term improvements to public amenity in and around our villages although such infrastructure projects do cause local disruption in the short term.

Our strategy of pro-actively securing vacant possession of a number of key shops and restaurants had almost doubled the rental value of our vacant commercial space to £4.3 million at 31 March 2008 compared with the previous year end. In the three months to 30 June 2008, we have completed new lettings of over £2 million per annum to tenants with interesting new concepts and at rents above our expectations.

Analysis of Vacant Wholly Owned Commercial Space at 30 June 2008

	Shops	Restaurants and leisure	Offices	Total
Estimated Rental Value	£'000	£'000	£'000	£'000
Under refurbishment	547	34	590	1,171
Ready to let	713	225	340	1,278
Under offer	240	100	34	374
Total	1,500	359	964	2,823
Area - sq. ft.	27,000	9,000	25,000	61,000

We are continuing our strategy of securing vacant possession wherever we can see opportunities to advance rental growth through reletting or reconfiguring our buildings.

At 30 June 2008, 17,000 sq. ft. of smaller offices were being converted to create 31 new apartments. Their estimated rental value is in the order of £750,000 per annum. Most of these apartments are due for completion before 30 September 2008 and current indications suggest that they will let readily.

The development of St. Martin’s Courtyard, the mixed use project we are carrying out in our Longmartin Joint Venture, is well under way. There is strong interest to lease the three shops on Long Acre in the first phase, which is now nearing completion. Also, we have encouraging enquiries for both shops and restaurants in the Courtyard project, the first of which become available at the end of 2009.

As has been widely reported, property yields continue to rise, resulting in a market-wide fall in values. Whilst properties that meet our very selective purchase criteria remain scarce, we do expect more opportunities to arise over the next six to twelve months as sentiment continues to deteriorate.

Finance

We have carried out further restructuring of our interest rate hedging arrangements, so we now have in place fixed rate hedging on £360 million of borrowings at an average rate of 5.06% (equivalent to 5.74% including the margin over LIBOR we currently pay on our bank borrowings) for a weighted average period of 20 years.

Our financial position remains strong, with committed unutilised bank facilities of £75 million. We are actively exploring options to increase these facilities so that we are able to take full advantage of the acquisition opportunities we expect to see in the period ahead.

We now expect to complete the process to include our interest in the Longmartin Joint Venture within our REIT group during the next financial year so that conversion would take effect from 1 October 2009. This delay will have no material adverse financial impact on us.

Prospects

Whilst our portfolio cannot be immune from the deterioration in economic outlook and general sentiment, the levels of activity and strong tenant demand we are currently experiencing continue to give us confidence for the future. Based on past experience, our strategy of investment only in distinctive villages in the busiest parts of London’s West End should ensure that the Group continues to prosper.

Contacts:

Shaftesbury PLC - 020 7333 8118

Jonathan S Lane - Chief Executive

Brian Bickell - Finance Director

City Profile – 020 7448 3244

Simon Courtenay

William Attwell

Forward-looking statements

This document includes statements which are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Shaftesbury PLC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Ends.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IMSSDAFDSSASEEW

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