The central London landlord Shaftesbury anticipates a rise in visitors and spending in the West End now that the Elizabeth line has finally opened, as it hailed a swing back to profit after the value of its 16-acre property portfolio was boosted by rising rents.
The central section of the new line originally known as Crossrail opened on Tuesday morning, running between Paddington in the west through central London to the new station at Abbey Wood in the east. A full service incorporating the outer legs out to Shenfield in the east and to Reading and Heathrow in the west is expected by next spring.
Shaftesbury said in the longer term, the West End would benefit from the “material increase in visitor numbers and spending this line should bring”. It owns swathes of Chinatown, Soho and Covent Garden, near the new Tottenham Court Road and Bond Street interchanges.
International tourists are returning to the West End’s bars, restaurants, shops and theatres, and monthly sales are 7% better than pre-pandemic levels on average. Hospitality and leisure enjoyed a 9% rebound while retailers posted only a 4% increase. During the pandemic, people started shopping online more.
Shaftesbury made a profit before tax of £248m in the six months to 31 March, compared with a loss of £339m a year earlier.
It collected 95% of invoiced rent and its vacancy rate fell to 4.7%. Higher rents raised the value of its portfolio by 7.5% to £3.3bn, which means it has recovered more than a third of the near-27% slump in value suffered during the 18 months to 31 March 2021, when lockdowns turned the West End and other city centres into ghost towns.
However, the company is mindful of the worsening cost of living crisis. “Inflationary pressures, tax increases, rising cost of finance and supply chain disruption could weigh on the outlook for consumer confidence and spending,” it said.
The property group is buying more space to accelerate new projects including those put on hold during the pandemic, and acquired five buildings in Covent Garden, Chinatown and Fitzrovia for £19.6m in the six-month period.
Brian Bickell, the chief executive, said: “The continuing strong rebound in the West End economy since the lifting of pandemic restrictions last summer has continued throughout the period.” He said London retained its international appeal and would continue to thrive, with an “improving outlook for international leisure and business travel”.
Crossrail has been a boon to house prices, and the cost of the average property has more than doubed in a decade around its stations east and west, outstripping the London rise of 55%, according to Rightmove data.
