Shaftesbury NAV soars on demand for property in London's West End

Very strong demand across its property portfolio in the last year has driven net asset value (NAV) soaring higher at Shaftesbury, the real estate investment trust focused on London's West End.

NAV increased by 25.7% to £7.13 per share, well ahead of analyst forecasts, thanks to high occupier and investment demand for the retail, restaurant and leisure properties, which drove nearly 7% rental growth and yield compression.

FTSE 250-listed Shaftesbury produced a net asset value return, before dividends, up 28.0%, as net property income rose £6.5m, or 8.9% to £79.7m.

It enjoyed a 21.0% like-for-like revaluation surplus in the period as all of its London 'village' locations, which include Carnaby Street, Chinatown, Soho and Charlotte Street, benefited uplift and together enjoyed yield compression of around 55 basis points to 4.00% in the wholly owned portfolio and 48 basis points to 4.10% in its 50%-owned Longmartin joint venture over St Martin's Courtyard in Covent Garden.

Overall, the portfolio delivered like-for-like capital growth of 21.0% and the like-for-like portfolio cumulative annual growth rate over three and five years has been 11.8% and 11.3% respectively.

Chief executive Brian Bickell said: "Both near-term and longer-range forecasts anticipate continuing growth in London's working and residential population and economic performance. Our proven, long-term approach to creating and maintaining busy and prosperous environments continues to attract strong demand from operators specifically seeking space in our carefully-curated and lively locations.

"The current strength of demand across all uses, which shows no sign of slowing, continues to deliver increases in both income and rental values. We remain confident we shall continue to deliver long-term outperformance in growth in income, capital values and shareholder returns."

Broker Liberum hailed the 'blowout' set of results, with NAV 11% ahead of its forecasts due to both stronger than anticipated yield compression and rental value growth.

"Occupier and investment demand underpins yields at current lows and we make high teens upgrades to NAVs."