Interim Management Statement

Shaftesbury PLC

Interim Management Statement

For the period 1 April 2014 to 24 July 2014

SHAFTESBURY REPORTS CONTINUED STRONG DEMAND AND ASSET MANAGEMENT ACTIVITY ACROSS ITS PORTFOLIO

Shaftesbury is well placed to be a long-term beneficiary of London's status as Western Europe's largest and fastest-growing city, as well as one of the world's leading global destinations. Our unique portfolio extends to 14 acres in the heart of the West End and comprises some 580 shops, restaurants, cafes and bars. It continues to benefit from ever-growing domestic and international demand from businesses seeking to locate here, as well as unrivalled numbers of visitors, from across the world, coming to experience its exceptional choice of cultural, shopping and leisure attractions.

Portfolio activity

The objective of our successful long-term asset management strategy is to deliver sustained growth in rental income and values. We achieve this by:

· enhancing our buildings through reconfiguration and refurbishment, with a particular focus on maximising and improving retail, restaurant and leisure space; and

· actively managing our tenant base and promoting our areas to create and maintain interesting and prosperous locations.

Individual schemes and transactions not only deliver good initial returns, but, by virtue of the concentration of our ownerships, provide long-term benefits which are compounded across our adjacent holdings.

Occupier demand for all our uses - shops, restaurants and leisure, offices and residential - continues to be very strong, resulting in growth in rental income and values, and low levels of vacancy. Over the year to date, we have completed lettings, lease renewals and rent reviews with a total rental value of £19.1 million. Commercial lettings and renewals have achieved rents 4.9% above valuers' ERVs at 30 September 2013. Commercial rent reviews have increased rents by 27.2%, broadly equivalent to compound growth of 5% p.a. taken over a five year period. This transactional evidence is particularly valuable to us in establishing higher rental tones in our adjacent ownerships.

Our income and value-enhancing refurbishment programme continues apace; during the year to date we have progressed schemes over 139,000 sq. ft., equivalent to 8% of the floor space in the wholly-owned portfolio. We continue to identify further schemes, some of which involve buying out leases so that we can accelerate the opportunity to create further rental growth.

Acquisitions

Over the year to date, additions to our portfolio totalled £107.7 million. We continue to be highly selective in our acquisitions, focussing on buildings which complement our existing, extensive ownerships and which, with the benefit of our management expertise, have the potential for sustained outperformance in income and capital value growth. Unsurprisingly, existing owners are reluctant to sell, recognising the exceptional security and long-term prospects of their investments and the limited opportunities to reinvest in these locations. In the quarter ended 30 June 2014, we acquired one property in Soho, at a cost of £4.2 million, which includes a restaurant, bar, 2,000 sq. ft. of office space and two apartments.

Vacancy at 30 June 2014

* based on estimated rental value ("ERV") at 31 March 2014 and ERV of acquisitions completed to 30 June 2014.

Our mixed-use scheme, in Carnaby, to redevelop the buildings fronting the south side of Foubert's Place and Kingly Street (ERV: £2.0 million) is progressing well and is expected to be completed in phases from early 2015. We shall shortly commence marketing the retail, restaurant and office space.

The ERV of other schemes in progress at 30 June 2014 was £2.6 million, equivalent to 2.2% of total ERV. This included five small shops (ERV < £100,000 p.a.), four restaurants, cafes and bars and 11,000 sq. ft. of office space. It also included the creation or improvement of 45 apartments (ERV: £1.2 million) which we expect to complete over the coming six months.

The ERV of available to let space was £3.2 million (31.3.2014: £2.7 million), of which £0.8 million was under offer. The remaining ready to let vacancy increased from 1.1% to 2.1% over the quarter, partly due to the completion, in June, of two reconfigured restaurants (7,500 sq. ft.) in Chinatown. Also, at the end of June, we secured vacant possession of a 3,900 sq. ft. prominent restaurant on Cambridge Circus, at the gateway to Seven Dials. Each of these units is being marketed and already there is strong interest from experienced domestic and international restaurateurs with new and interesting concepts.

We had four large shops ready to let (total 6,500 sq. ft.; ERV: £0.5 million) at 30 June 2014. We continue to have very little vacant office space (1,000 sq. ft.) and of the thirteen apartments available to let at 30 June 2014, six were under offer.

Finance

‡ Pro-forma analysis at 30 June 2014, allowing for the dividend payment on 4 July 2014

* Based on nominal value of debt

On a pro-forma basis, after allowing for the interim dividend payment on 4 July 2014, total debt at 30 June 2014 was £612.5 million and our undrawn committed facilities totalled £143.3 million.

As previously reported, during the period we completed the refinancing of a £100 million variable-rate bank facility, replacing it with a new £134.75 million fixed-interest term loan from Canada Life. The refinancing included the termination of interest rate swaps with a notional principal of £110 million at a cost of £29 million, equivalent to 10p per share; provision was made for this cost in our half year results. The restructuring has diversified our sources of finance, increased the weighted average debt maturity, and reduced the weighted average cost of debt which, at 30 June 2014, was 5.14%, 0.62% lower than at 31 March 2014. Our current marginal cost of borrowing is around 1.5%, so drawings under our committed facilities will reduce further this average cost of debt.

The fair value deficit of our long-term interest rate swaps at 30 June 2014 was £65.5 million, £0.9 million higher than for the equivalent swaps at 31 March 2014.

Looking ahead

London and the West End's success and dynamism underpin the prosperity and prospects for our unique portfolio. Against the background of sustained demand for all our uses, we continue to identify and implement asset management initiatives and schemes which we are confident will deliver further income and capital value growth for our shareholders.

24 July 2014

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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 14 acres of freeholds, now includes 331 shops and 249 restaurants, bars and cafés, which together account for circa. 72% of our current income. The 413,000 sq. ft. of offices and 489 apartments in the wholly owned portfolio provide 16% and 12% respectively of our 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 24 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 Shaftesbury PLC or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance.

Ends.