Shaftesbury owns prime central London locations, including Carnaby Street
(Picture: PA)Landlord Shaftesbury has heralded a “rapid rebound” in the West End’s economy as shoppers flood back into the area, as it claims it is broadly insulated from the wider cost-of-living crisis in the UK.
The company’s full year results showed footfall and spending were both higher than in 2019, with its occupiers reporting average monthly sales around 6% ahead of pre-pandemic levels.
Aided by both the return of international travel and the new Elizabeth line, the area around Carnaby Street, Soho and Chinatown has been “heaving”, according to chief executive Brian Bickell.
“Tourists, both domestic and international, are back in huge numbers, and offices are busy again” he said.
“We’re surprised how quickly it’s come back.”
Even if times are tough elsewhere, both retailers and restaurateurs are still seeking space in prime central London locations, he said. He also reported an increase in smaller brands seeking physical space for the first time following successful online launches.
And because the company benefits from so much overseas spending, he said he was confident about its ability to weather the current financial challenges many UK households face.
“It’s a feature of the West End that it has never really been reliant on what goes on in the wider UK,” Bickell said.
“Although London and the West End cannot be immune from the unprecedented range of challenges which are now dominating the national outlook, their long-term prospects remain bright.”
Its net income from its properties rose 28% to £82.8 million, in part because it has now ditched the financial support measures for its tenants which were in place throughout the last couple of years.
Bickell suggested that waiving or reducing some rents - a move which cost it £75 million during the pandemic - allowed it to keep tenants in place, leading to fewer vacancies and aiding the recovery of the area.
However, the value of the company’s portfolio is still lagging behind 2019 figures.
Shaftesbury’s shops, offices and residential properties were worth £3.2 billion at the end of September, 3.6% more than at the same point last year but 4.6% below pre-pandemic values.
In the first half of the 12-month period, the like-for-like increase was 7.5%, but that was followed by a 3.6% decrease in the second half.
“The portfolio valuation grew in the year, but first-half gains were partly reversed in the second half as valuation yields increased in response to globally rising finance rates and the deterioration in the macroeconomic outlook,” Shaftesbury said.
The company is due to merge with Covent Garden owner Capco early next year.
