Shaftesbury’s strategy

Shaftesbury’s strategy is very clear and focused. The Company invests only in those districts within the West End which have an enduring demand from occupiers and popularity with their customers. Our investments are all close to the unique cluster of shops, restaurants, theatres, cinemas and world class galleries, museums and historic sites, which are the essence of London’s West End. These districts all have excellent access to a wide choice of public transport both day and night.

We invest in locations close to streets traditionally regarded as prime with the aim of assembling clusters of buildings or villages where we see opportunities to create rental growth. This approach allows us to benefit from active estate management across our villages, with bold projects and innovative changes of use. We have a wide range of unit sizes and uses within our portfolio which provide us with great flexibility in meeting the needs of tenants and adapting to changing conditions.

An essential ingredient of this strategy is our encouragement of new trading concepts. Many of our retail and restaurant tenants are unique. At the same time well known international brands are choosing to locate their first UK stores in our villages. In this way, our villages are a refreshing antidote to what is available elsewhere in increasingly homogenous high streets and shopping centres.

Implementation of this strategy demands an exceptionally detailed knowledge of our locations, individual properties and potential tenants. We derive considerable expertise and market advantage from working within a few minutes walk of all our investments. Also, we have acquired a specialised and very intricate blend of skills both to regenerate buildings and to create distinctive space with an emphasis on shops and restaurants, which in our villages we know will let well and suffer limited obsolescence.

Our Portfolio - as at 30 September 2007

At 30 September 2007, the Group’s portfolio was valued at £1,394m.  The wholly owned portfolio comprised 292 shops (368,000 sq ft), 153 restaurants (399,000 sq ft), 425,000 sq ft of offices and 254 flats and maisonettes. 

Our wholly owned portfolio at 30 September 2007 included 292 shops extending to 368,000 sq. ft. and producing 41% of total income with an average unexpired lease term of seven years. Sixteen of our twenty vacant shops available to let are small units of under 1,000 sq.ft. Recently, we have identified a number of larger shops where we can secure vacant possession in 2008 and where we see potential to establish new rental levels.

We have 153 restaurants, bars and clubs with a total area of 399,000 sq.ft.in our wholly owned portfolio. They provide 29% of contracted income with an average unexpired lease term of 15 years. Catering projects are long-term investments for both landlord and tenant. Installation of plant essential for today's high quality restaurants can present particular challenges in conservation areas and often listed structures such as our own. Whilst such practical issues, combined with a strict planning and licensing regime, greatly limit the supply of new restaurants in the West End, there is, at the same time a growing demand from experienced and enterprising caterers to open new ventures as the popularity of "eating out" increases. Consequently, we have strong interest whenever a restaurant comes vacant.

Offices in out wholly owned portfolio extend to 425,000 sq.ft. With 334 tenancies, they comprise the largest single tenant group for in our portfolio. However, they only represent 23% of our income. Whilst virtually all our offices are let, the unit size is small (1,270 sq. ft. on average) and leases are short, with an average un-expired term of four years. We are aware that the office market tends to be cyclical and in any downturn our office tenants, unlike our retail and restaurants tenants, can readily find alternative locations. Consequently, we continue our long-term policy of converting smaller and older office space to other less cyclical commercial and residential areas.

We have 254 apartments in our wholly owned portfolio, which now represent 7% of our income. They are currently fully let. Such is the strength of current demand that when a unit becomes vacant it is usually re-let and income-producing within 4 weeks. Whilst we expect to make selective residential sales, we will also continue with our current conversion programme to create new flats and maisonettes.