Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — H1 2024 Earnings Presentation
45 slides from Shaftesbury Capital's earnings presentation, Jul 31, 2024
Slide 1: 2024 Interim Results
2024 Interim Results 31 July 2024 Investing to create thriving destinations in London’s West End where people enjoy visiting, working and living
Slide 2: Delivering on our priorities
Delivering on Robust Strong Confidence in our priorities financial operating medium and performance performance long-term growth
Slide 3: Delivering on our priorities
Delivering on our priorities
Slide 4: Delivering income and value growth
Delivering income and value growth Strong performance across the business • Excellent leasing momentum • Portfolio valuation growth • Positive trends in footfall and customer sales • Converting reversion into contracted income • Active capital rotation, improving portfolio quality • Strong balance s
Slide 5: Iconic destinations in the heart of London's West End
Iconic destinations in the heart of London’s West End 2.7m sq. ft. c.2,000 c.640 £4.8bn Lettable space Lettable units1 Buildings Portfolio value Valuation: +0.9% ERV: +4.0% % of wholly-owned portfolio value Valuation: +2.0% ERV: +2.5% Covent Garden 52% Valuation: +1.7% Carnaby | Soho 32% ERV: +2.1%
Slide 6: London's West End: Unrivalled appeal and features
London’s West End Unrivalled appeal and features Global destination • Wide variety of retail, hospitality and leisure experiences • Unrivalled concentration of entertainment and cultural attractions • Seven days-a-week trading environment Excellent connectivity • Elizabeth Line stations enhancing fo
Slide 7: Group headline financials
Group headline financials Strong performance and progress Strong leasing activity delivering rental growth +1.4% (L-f-L) +1.6% • 217 leasing transactions; +7% ahead of Dec 23 ERV Portfolio valuation EPRA NTA per share £4.8bn 193.4p Continued progression in underlying earnings and dividend distributi
Slide 8: Robust financial performance
Robust financial performance
Slide 9: Growth in underlying earnings and dividends
Growth in underlying earnings and dividends H1 2024 H2 2023 H1 2023 £m £m £m1 Rental income 98.8 101.9 78.0 Property costs (18.1) (18.3) (14.6) Net rental income 80.7 83.6 63.4 Other income2 - 0.1 2.6 Administration costs (20.1) (21.4) (17.9) Net finance costs (27.9) (30.4) (21.5) Share of associate
Slide 10: Capturing rental growth and confidence in medium-term targets
Capturing rental growth and confidence in medium-term targets Medium-term rental growth target £m 5-7% p.a. 23% Income Net under reversion rented Under EPRA vacancy refurbishment Of which £4.1m Realised on L-f-L Contracted is under offer, completion and L-f-L resulting in letting of schemes Realised
Slide 11: Valuation growth resulting in increased NTA per share
Valuation growth resulting in increased NTA per share 2024 2023 Variance £m £m £m 30 Jun 31 Dec Property portfolio1 4,794 4,760 34 Investment in joint ventures and associates 86 83 3 Net debt (1,481) (1,499) 18 Other 138 136 2 Net assets 3,537 3,480 57 EPRA net tangible assets 3,538 3,479 59 EPRA ne
Slide 12: Return to valuation growth driven by improved ERV
Return to valuation growth driven by improved ERV Valuation +1.4% L-f-L over H1 to £4.8bn Valuation and ERV well-underpinned • +3.2% L-f-L ERV growth to £241m Equivalent yield ERV psf Valuation psf • +7bps movement to 4.4% equivalent yield (4.6% for the commercial portfolio) June 2024 4.4% £88 £1,76
Slide 13: Strong balance sheet and debt metrics
Strong balance sheet and debt metrics Access to substantial liquidity • £484m of cash and undrawn facilities, taking into account repayment of £95m of maturing private placements in H2 • Well-positioned to act on market opportunities £1.5bn £484m • Modest capital commitments Net debt Liquidity 4.0%
Slide 14: Diversified debt profile and sources of funding
Diversified debt profile and sources of funding • Early exercise of first extension on Drawn debt maturity profile £350m loan facility (£200m term plus £150m undrawn RCF), taking £m maturity to December 2027 In addition, undrawn • Completion of new 5-year facilities of £300m unsecured bilateral £75m
Slide 15: Access to significant liquidity
Access to significant liquidity Total liquidity2 £m £578.8 +£127.8m disposals -£103.6m capex and acquisitions 1. Closing cash excludes £13.9 million of tenant deposits 2. £484 million of cash and undrawn facilities, taking into account repayment of £95 million of maturing private placements in H2 20
Slide 16: Strong operating performance
Strong operating performance
Slide 17: Strong leasing momentum
Strong leasing momentum Strategy translating into performance 217 new lettings/renewals 38 commercial rent reviews High occupancy £28.1m £10.6m 2.7% +7.4% vs Dec-23 ERV +5.3% vs previous rent ERV available to let +15.8% vs previous rent 17 2024 Interim Results
Slide 18: Retail
Retail A strong retail leasing market High performing categories • Continued customer sales growth Pangaia, Carnaby St Premium fashion Emphasis on category selection 20 retailers have upsized or relocated Footwear across the portfolio to date • Increased scale and depth providing Elemis, Monmouth St
Slide 19: Significant opportunity to grow rents: Retail ITZA rental tones by street
Significant opportunity to grow rents Retail ITZA rental tones by street • Average SHC Zone A retail rents up 4% to £480 ZA in H1 £270 £250 • Average SHC rents significantly below West £200 £270 End average £390 £1,000 £500 £390 • Broad range of price £280 points £420 £630 £780 • Affordable rent to
Slide 20: Hospitality & leisure
Hospitality & leisure £82.7m 34% ERV of portfolio +3.7% L-f-L value Strong customer and consumer demand • 4 new concepts introduced in Covent 399 £87 Garden Units ERV per sq ft 1.0m sq ft • Introducing al fresco on Carnaby St and progressing Kingly Court line-up • Continued demand across Chinatown E
Slide 21: Offices
Offices £50.3m 18% £78 409 ERV of portfolio ERV Units +4.8% L-f-L value per sq ft 0.6m sq ft Strong leasing momentum for West End prime offices • Attracted to high quality space in vibrant locations • High amenity value and excellent environmental Selection of H2 2024 completions credentials • Carna
Slide 22: Residential
Residential £25.5m 14% £59 683 ERV of portfolio ERV Units -0.2% L-f-L value per sq ft 0.4m sq ft Robust demand across our West End portfolio • Interest from a broad range of customers • Autumn is typically the peak leasing period 118 new lettings and renewals completed • £4.3m new contracted income
Slide 23: Investing in and upgrading our portfolio
Investing in and upgrading our Refurbishment: The Hide, 3 Kingly Court portfolio Investment opportunities across the portfolio • Refurbishments which enhance our assets (£19.5m capex incurred this period) • 194k per sq ft (7.8% of ERV) under refurbishment (c.50% pre let or under offer) Enhancing the
Slide 24: Creating sustainable and vibrant places
Creating sustainable and vibrant places EPC performance Where people enjoy visiting, working and living 84% 65% Commitment to become Net Zero Carbon by 2030 A-C rating A-B rating • Updated net zero carbon roadmap to be published in H2 +4ppts +9ppts in the period in the period • Our first EPRA Sustai
Slide 25: Confidence in medium and long-term growth
Confidence in medium and long-term growth Delivering income and value growth • History of long-term resilience and sustained demand for the West End Opportunities from scale • Strong leasing pipeline and excellent levels of activity • Over 20 customers upsizing across the portfolio Significant growt
Slide 26: Confidence in medium and long-term growth
Confidence in medium and long-term growth
Slide 27: un eee
un eee lias Cee OY
Slide 28: Appendices
SHAFTESBURY CAPITAL $
Slide 29: Our priorities over the next 3-5 years
Our priorities over the next 3-5 years 1. Deliver growth in rents, earnings and dividends 2. Realise long-term potential of our assets 3. Accelerate cost savings and operating efficiencies 4. Accretive investment into our portfolio 5. Active asset rotation through capital recycling 6. Maintain a str
Slide 30: Our strategy
Our strategy To deliver long-term income and value growth from our unique portfolio of properties through investment, curation and responsible stewardship Creative and active approach Place our customers at the heart of the business Disciplined financial management Sustainable and community minded B
Slide 31: Mixed-use portfolio
Mixed-use portfolio Well-balanced, diverse income streams Valuation Annualised gross income ERV Equivalent yield 12% 11% June 20241 14% 34% 38% 34% 15% 21% 18% £4.8bn £196.5m £241.0m 4.41% 35% 34% 34% December 20232 14% 12% 11% 34% 35% 16% 38% 20% 18% £229.3m £4.7bn £185.4m 4.34% 34% 34% 34% 1. Incl
Slide 32: Retail ITZA rental tones by street
Retail ITZA rental tones by street Significant opportunity to grow rents ITZA £psf 1,500 1,250 1,000 750 500 250 0 SHC West End James St King St Covent Carnaby St Long Acre Royal Opera Foubert's Floral St Henrietta St Earlham St Monmouth Neal St Foubert's Newburgh average average* Garden North House
Slide 33: Historical reversionary potential and ERV growth
Historical reversionary potential and ERV growth £m 252 258 239 237 241 225 221 227 205 208 193 197 185 181 187 175 178 165 165 156 153 145 143 131 129 122 115 121 108 94 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 2024 Covid-19 Annualised gross income ERV Numbers reflec
Slide 34: Portfolio summary by use
Portfolio summary by use Retail Hospitality & Offices Residential Total leisure 34% 34% 18% 14% 100%1 Valuation (£m)2 1,675.5 1,629.6 854.8 669.3 4,829.2 Annualised gross income (£m) 69.6 73.5 30.0 23.4 196.5 ERV (£) 82.5 82.7 50.3 25.5 241.0 ERV psf (£) 115 87 78 59 88 Net initial yield 3.8% 4.1% 2
Slide 35: Portfolio valuation summary by destination
Portfolio valuation summary by destination Covent Garden Carnaby | Soho Chinatown Fitzrovia Total 52% 32% 15% 1% 100%1 Valuation (£m)2 2,574.9 1,523.7 702.1 28.5 4,829.2 Annualised gross income (£m) 102.1 61.0 31.9 1.5 196.5 ERV (£) 127.4 78.4 33.7 1.5 241.0 ERV psf (£) 91 88 80 62 88 Net initial yi
Slide 36: Portfolio leasing summary by use and destination
Portfolio leasing summary by use Retail Hospitality & Offices Residential Total leisure 34% 34% 18% 14% 100%1 H1 2024 transactions 40 20 39 118 217 New contracted rent (£m) 9.3 4.0 10.5 4.3 28.1 % above Dec 23 ERV 5.4% 8.6% 10.3% 3.9% 7.4% % above previous passing rent 17.7% 20.2% 17.6% 7.3% 15.8% P
Slide 37: Available to let, under offer, under refurbishment
Available to let Hospitality Retail & leisure Offices Residential Total1 ERV (£m) 1.3 1.9 1.9 0.8 5.9 % of portfolio 0.6% 0.8% 0.9% 0.4% 2.7% Area (‘000 sq ft) 18.6 46.2 26.3 12.0 103.1 1. Includes 17 units let on a temporary basis (ERV £1.3m) Under offer Hospitality Retail & leisure Offices Residen
Slide 38: EPRA NTA per share movement
EPRA NTA per share movement Pence 38 2024 Interim Results
Slide 39: Strong covenant position
Strong covenant position H1 2024 H1 2023 Loan-to-value £m £m Debt at nominal value 1,609.8 1,711.3 Less: cash1 (128.8) (157.3) Net debt 1,481.0 1,554.0 Total property portfolio at market value 4,831.1 4,865.2 Loan-to-value 30.7% 31.9% EPRA net debt2 1,527.7 1,552.5 EPRA property portfolio2 5,060.1 5
Slide 40: Debt covenants summary
Debt covenants summary Nominal Average Maturity Test ICR LTV Value interest rate Frequency Covenant Covenant £450m 4.7% 2030: £130m Half yearly 1.35x 65% Aviva term loan 2033: £200m 2035: £120m Canada Life term loan £135m 4.5% 2029 Quarterly 1.4x 60% Exchangeable bond1 £275m 2.0% 2026 - - - Senior u
Slide 41: Joint ventures and associates
Joint ventures and associates We own a 50 per cent interest in Lillie Square and Longmartin; all figures represent our 50 per cent share Lillie Square (Joint venture) Leasing activity • Over 60 units leased on short-term basis representing £1.9m contracted income Valuation • -0.6% decline (like-for-
Slide 42: A sustainable and responsible business
A sustainable and responsible business Benchmarks1 Carbon Disclosure Project EPRA sustainability reporting awards Standing Investments Assessment Gold 74/100 with 2 Green Stars ISS ESG Corporate Rating: 1st Decile Memberships2 1. Benchmark scores primarily based on legacy Capco data. This will be up
Slide 43: Principal risks
Principal risks • Impact of uncertain interest rate environment and lack of availability or increased cost of debt or equity funding • Inflationary pressures on operating costs, including energy and the cost-of-living crisis Economic, political and • Adverse impact on business and consumer confidenc
Slide 44: Important notices
Important notices This presentation contains “forward-looking statements” regarding the belief or current expectations of Shaftesbury Capital PLC, its Directors and other members of its senior management about Shaftesbury Capital PLC’s businesses, financial performance and results of operations. The
Slide 45: Shaftesbury Capital PLC
Shaftesbury Capital PLC Regal House, 14 James Street London, WC2E 8BU T 020 3214 9150 shaftesburycapital.com