West End landlord Shaftesbury saw the value of its portfolio decline by almost a fifth in the year to September, as the company continued to reel from the Covid-19 pandemic.
The landlord, whose 16-acre portfolio spans Carnaby Street, Covent Garden, Soho, Fitzrovia and Chinatown, said the value of its wholly-owned properties dropped by some 18% to £3.1bn.
Net asset value plunged by 24.2% on the previous year to £2.29bn, or £7.43 per share, as tenants struggled to pay rent amid widespread lockdowns for much of the year. The company reported a loss of £699.5m, having made a £26m profit the previous year.
Shaftesbury collected just 53% of contracted rent for the six months to 30 September. More than a third of rental payments had been deferred or waived entirely, while 13% remain outstanding.
The FTSE 250 firm said that despite attempting to provide tailored financial support to its tenants, many of which are retailers, pubs and restaurants, the vacancy rate jumped to 10.2%, up by 6.5 percentage points over the 12-month period.
The results come as shops, restaurants and bars across the West End estate brace themselves for tier-three restrictions at midnight tonight, which will force all hospitality venues to close.
Businesses in the popular tourist area have already suffered more than most during the pandemic, and although visitor numbers rose briefly over the summer, the harsher measures that have come in over autumn and winter have put them back in the firing line.
And chief executive Brian Bickell told EG that with the heightened restrictions coming in at midnight, things would likely get worse before they got better for tenants.
“We’ve now come into November and December which are the months when all of those businesses make a huge chunk of their annual profit, and they’ve only been able to trade normally for two weeks,” he said.
However, he stressed that the landlord, which switched to monthly rent collections in October, would continue to provide support for tenants. “Shaftesbury is going to be pragmatic about it,” he said. “You can’t get blood out of a stone.”
He added businesses “definitely” needed the government to give assurances that the business rates holiday for retailers and hospitality firms would be extended beyond 31 March.
“The trouble is they leave everything until the last minute,” he said. “What we all need is the government to give businesses some certainty and clarity.”
Shaftesbury raised £307m last month to help it weather the storm and pay off a mounting debt pile. However, net debt still rose over the year to £987m, up from £905.8m this time last year.
Shares in the company fell 4.8% on Tuesday morning, meaning they are now down 42.8% on the beginning of 2020.
