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Buoyant retail sector sees profits surpass £100m at Shaftesbury

The surprise bounce in UK retail following the EU Referendum has fuelled a heartening set of half year results for West End property owner Shaftesbury, which has enjoyed strong footfall and revenue growth in the last six months.

Profits after tax at the firm, which owns 14.5 acres of property in the heart of London’s West End, have risen to £102m for the half year to 31 March 2017, rising from £80m for the same period next year.

According to the company, which owns assets in marquee destinations including Covent Garden and Chinatown, footfall across its retail, restaurant and leisure assets remained ‘good’ over the period, as British consumers remained undeterred by the uncertainty surrounding the UK’s exit from the EU.

Occupier demand also remained strong while total asset value for the property firm rose by 3.5% to £2.5bn.

Brian Bickell, Chief Executive, said: “This has been another busy period for Shaftesbury, with the benefit of asset management activity across the portfolio and last year’s refinancing initiatives delivering growth in earnings, the interim dividend and portfolio value.

“Across our portfolio, the data we collect is showing a clear trend of year-on-year turnover growth for our restaurant, leisure and retail tenants, reflecting the buoyancy of the West End’s economy. Occupier demand for these uses, and our office and residential space, is good and vacancy levels remain low.”

However, Bickell added that the prospect of a drop in business and consumer confidence remained high as the Brexit negotiations kick into gear over the coming months.

There have already been signs in recent months that the UK’s retail spending boom over the last six months is stalling, as the impact of stagnating wages and inflation began to hit consumer spending power.

Bickell warned: “Looking ahead, the UK faces a period of uncertainty as it negotiates its exit from the EU. Whilst this brings a risk of lower business and consumer confidence, we expect the West End, underpinned by its wide appeal and dynamic economy, will maintain its long record of resilience.

“Our exceptional portfolio, located in its most popular destinations, continues to flourish. With the benefit of our forensic local knowledge and enterprising management, we are confident it will continue to deliver sustained long-term growth in income, capital values and returns to shareholders.”