London’s West End, which suffered greatly during the pandemic, is slowly making its way towards recovery. Shaftesbury, a property trust that owns a significant portion of land in the area, has expressed confidence in its ability to return to sustainable long-term growth. CEO Brian Bickell has noted positive signs such as an increase in demand for space, lettings, footfall, and spending since the area reopened on April 12th.
However, Bickell remains cautious about the potential for delays and setbacks in the recovery process, despite optimistic forecasts for the UK economy. International travel is not expected to fully recover until later next year, so Shaftesbury is relying on a substantial rise in domestic tourism and local visitors to the West End and the surrounding villages.
The impact of the past year’s disruptions was evident in Shaftesbury’s financial results for the six months ending on March 31st. The company reported a post-tax loss of £338.5 million, primarily due to revaluation deficits totaling £342.6 million. The valuation of the company’s owned portfolio also fell by 10.1% year-on-year, with the retail and hospitality sectors experiencing significant declines.
The net property income across Shaftesbury’s portfolio decreased by 42.6% compared to the previous year, primarily due to reduced rent collections and increased vacancies. Rental income also saw a like-for-like decrease of 19.4%. Despite these challenges, there were some positive signs, as the available to-let space decreased slightly, indicating improved occupier demand.
While the collection rate for contracted rents stood at 50% for the year ending March 31st, it dropped to 43% for the six-month period. However, there is progress in leasing activity, with significant transactions signed during the period. Additionally, the trust has continued to see leasing activity since March 31st, further indicating positive momentum.
Looking ahead, Bickell anticipates an improvement in occupier demand as businesses seek to establish themselves in the vibrant and thoughtfully curated villages of the West End. The trust’s flexibility and commitment to innovation will allow for continued adaptation to meet the changing expectations of occupiers in this dynamic landscape.
Despite ongoing challenges, the signs of progress and positive momentum provide hope for the future of London’s West End. With increased demand, recovering leasing activity, and the potential influx of domestic tourists, the district is on its way towards sustainable long-term growth.
Links:
1. Shaftesbury Share Price Information
2. West End London Official Website
