Shaftesbury warns on rents as portfolio value drops

Shaftesbury warned that at least half its rent could go uncollected in the second half as the London West End property company reported a drop in the value of its portfolio as the Covid-19 crisis struck.

The value of Shaftesbury's wholly owned properties fell 7.9% to £3.5bn during the six months to the end of March. As a result the company swung to a loss of £287.6m from a £38.7m pretax profit a year earlier.

Shaftesbury said it was in talks with about 800 tenants to agree arrangements on rents and charges during the Covid-19 emergency. The company said it expected to collect up to 50% of rents in the second half.

The results show Shaftesbury hit by the closure of shops, restaurants and other services during the Covid-19 shutdown and fears about its aftermath with the UK in a deep recession. The company, whose 600 properties are in prime London areas such as Soho and Covent Garden, has weathered previous stresses such as Brexit uncertainty.

Brian Bickell, Shaftesbury's chief executive, said: "Although our business performed well during the first four months of the period, the growing impact of the measures to address the pandemic are 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."

Shaftesbury scrapped its dividend in March because of the coronavirus crisis. With its results the company said it would restart dividends as soon as it is prudent and that the pace of the pandemic recovery would guide its decision.