West End landlord Shaftesbury suffered a sharp drop in profit this year after taking a writedown on the value of a retail joint venture in Covent Garden.
Profit after tax fell from £175.5m to £26m due to the revaluation of the portfolio, which dipped 0.6 per cent to £4bn overall.
However, the company’s EPRA earnings, which measures profit after tax excluding investment and development property revaluations, was up 5.6 per cent to £54.6m.
Net property income was up 4.5 per cent to £98m in the year ended 30 September.
Shaftesbury increased its dividend for the year to 17.7p, up 5.4 per cent on 2018.
Why it’s interesting
Shaftesbury said the joint venture with Longmartin, which represents five per cent of its portfolio, was hit with a 19.4 per cent write down on its retail valuation due to the larger, more “high street” style store space available.
“Trends in consumer spending patterns and structural changes in traditional, national retailing, resulting from developments in technology and logistics, continue to have a significant impact on retailers’ space requirements and their appetite to take on new commitments,” the landlord said in its full-year results.
However, despite the “uncertainties stemming from Brexit and the political impasse in Parliament”, the developer said the rest of its portfolio remained “resilient” due to its West End location.
What Shaftesbury said
Brian Bickell, chief executive, said: “In a year dominated by domestic political uncertainties and a slowing national economy, the qualities of our portfolio, business model and proven strategy, together, have delivered a resilient performance.
Our skill in curating distinctive, prosperous destinations, which combine authentic experiences and innovative choices, is complemented by our long experience in continually adapting our buildings to meet trends in demand, occupier requirements and stringent environmental standards.
Our proven strategy, an impossible-to-replicate resilient portfolio, stable long-term financing and, most importantly, an experienced, enthusiastic and entrepreneurial team, guided by a responsible culture and embedded values, together provide the ingredients for the continued long-term success of this business.”
Main image credit: David Parry/PA Wire