West End landlord Shaftesbury will tap investors for £300m amid a sharp downturn in central London footfall during the coronavirus pandemic.
The property firm announced today that it intends to raise around £297m through a discounted offer of new shares, with the potential to raise £307m dependent on investor appetite.
Shaftesbury, which owns 16 acres of property in the West End, is offering the new shares at 400p, a 20 per cent discount on yesterday’s closing price of 501p.
The company said today that the pandemic had caused a sharp decline in domestic and international footfall, and trading conditions for hospitality and retail tenants had deteriorated.
Office and residential occupiers had also been affected, with tenants across all sectors struggling to meet rental and lease obligations.
It comes four months after Shaftesbury announced it had swung to a £287m loss in the first half of the year, as the value of its estate plummeted due to the crisis.
In June the company, which has a portfolio of restaurants, pubs, shops, and workspaces in central London, said that the store closures brought about by the nationwide lockdown had affected tenants’ ability to pay rent.
Shaftesbury chief executive Brian Bickell said: “The capital raising announced today will ensure the group maintains the financial flexibility and resources to navigate the unprecedented near-term operational challenges caused by the Covid-19 pandemic, and that we will be well-placed to benefit from the gradual return to more-normal patterns of life and activity that have always made London’s West End an unrivalled global destination.
“We are grateful for the support of our shareholders and new investors, and particularly our cornerstone investors Capco and Norges, with whom we share a commitment to, and belief in, the long-term prospects for the West End.”