Shaftesbury, one of the biggest landlords in London’s West End, has slumped to an annual loss as the pandemic hammered rental income and its properties fell in value.
The London-listed company, whose property portfolio is heavily exposed to the hospitality and retails sectors, on Tuesday reported a pre-tax loss of £699.5m in the 12 months to September, compared with a profit of £26m in the previous financial year.
With properties spanning London’s Chinatown, Carnaby and Seven Dials, the group has also been hit hard by the lack of tourists visiting the UK capital. The group said that the value of its portfolio had tumbled by almost a fifth to £3.1bn.
In a statement, Shaftesbury said that drop was down to “near-term income uncertainty, fall in occupier demand and increasing vacancy across the West End.”
Rental income for the financial year fell by almost a quarter to £74.3m, Shaftesbury said, adding that it had collected just 53 per cent of the rent it is owed for the six months to September 30 — the period covering the upheaval wrought by the pandemic.
The disruption unleashed by efforts to contain Covid-19 has also forced a rewriting of lease agreements as tenants faced financial hardship. That has typically resulted in a less stable income stream for commercial property owners.
Brian Bickell, the company’s chief executive, said: “Rarely in history has the world seen such widespread disruption to normal patterns of life.”
The pandemic had resulted “in reduced rent collections, increased vacancy, reduced occupier demand and a fall in property valuations,” he added.
As a result of the sharp drop in the value of its portfolio, Shaftesbury said its loan to value ratio climbed from 23.9 per cent to 31.5 per cent at the end of September.