Shaftesbury worried about impact of new restrictions on West End

Enquiries for commercial space are running at much lower levels than normal 

Shaftesbury -

Shaftesbury PLC (LON:SHB) said it's West End of London property estate has seen more activity since the easing of the coronavirus (COVID-19) pandemic lockdown in June, but the group is concerned about the new wave of restrictions imposed this week.

The FTSE 250-listed group said: "In view of growing uncertainty surrounding the timing of the return to more-normal footfall and trading conditions in the West End, and the impact of restrictions now being re-introduced by the Government, we are extending our support arrangements by a further three months to the end of December 2020.

Support might be extended further depending on trading over Christmas and the New Year, as well as the prospects for the early months of 2021 and beyond, it said in a statement. 

Brian Bickell, chief executive, added: "The course of the pandemic in the short and medium-term will continue to dictate the extent of restrictions imposed by the UK and other governments to contain the spread of the COVID-19 virus, with implications for the global economy and the pace of recovery.

"As an international destination, local trading conditions in the West End will inevitably be affected by these macro uncertainties."

Most of its 611 restaurant, café, pub and shop tenants had now reopened, the property group said. The West End has also seen a gradual recovery in footfall since June with the return of local and domestic leisure visitors and its office-based workforce, it added.

Rentals receipts were 41% of what was expected for the six months to September 30, 2020, Shaftesbury noted, with a further 10% subject to deferred collection arrangements with 23% being waived and 26% still outstanding. 

Vacancies have risen to 9.7%, up from 4.8% in March as overseas visitors returned home and long-haul travel business disappeared, the group added. Enquiries for commercial space are also running at much lower levels than normal. 

Shaftesbury said there will not be a final dividend for the year to September 30, 2020, but it intends to resume dividend payments as soon as prudent.

AJ Bell's investment director Russ Mould said: “London is particularly reliant on footfall from office workers and foreign visitors, both of which are effectively being kept away by coronavirus restrictions which have just been tightened again.

“And in the same way that the Government is having to extend financial support to help get people through the winter, so Shaftesbury is extending its own package of support for tenants.

“It would be a shock to see the company continue to pay dividends against this backdrop and sure enough a payout is off the table for the foreseeable future."

Broker Liberum cuts its price target to 610p from 760p, but said the balance sheet remains healthy and there is plenty of liquidity for Shaftesbury to weather the crisis.

Shares rose slightly to 463p.


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Quick facts: Shaftesbury

Price: 498 GBX

Market: LSE
Market Cap: £1.53 billion

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