Shaftesbury, a commercial property landlord that owns large parts of Soho, Covent Garden, Chinatown and the West End in central London, has warned shareholders it is aiming to collect only 50% of rents due this summer as almost all its tenants remain closed amid the coronavirus pandemic.
Brian Bickell, Shaftesbury’s chief executive, said lockdown and physical distancing rules were having a “material impact on normal patterns of life and commerce, both for our occupiers and on the near-term prospects for our business and financial performance”.
Bickell said the company was in talks with about 800 commercial tenants about tailored solutions to reduce rent and services charges to try to allow shops and restaurants to weather the lockdown. Shaftesbury told shareholders its “aim [is] to collect c. 50% of rents due from April to September 2020 over time”.
According to Shaftesbury, the value of its 15.2-acre property portfolio has fallen by £300m since the start of the pandemic, which reflects low rental yields. The writedown represents a 7.9% decline in the value of the portfolio to £3.5bn.
Nearly all the shops and restaurants in Soho and surrounding areas remain shut, compared with regional high streets, where some cafes and non-essential retailers have reopened for takeaways. Passing trade in Soho is low as few people live in the area. Normally, streets such as Carnaby Street are packed with office workers or people travelling into London to shop and socialise.
Shaftesbury recorded a pre-tax loss of £287.6m in the six months to the end of March, compared with a £38.7m profit in the same period a year earlier. The company’s shares, which have lost about a third of their value since the start of the pandemic, 3.5% to 625p on Wednesday.
Earlier this month, Hong Kong billionaire Samuel Tak Lee agreed to sell his 26.3% stake in Shaftesbury to rival central London landlord Capital & Counties Properties.
