Shaftesbury Posts Strong Rebound despite Omicron Disruptions

Shaftesbury plc REIT (LON: SHB), which owns several buildings in London’s West End, reported a strong rebound despite the impact of Omicron.

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In the period from October 1, 2021, to February 3, 2022, the company reported that strong trading prior to ongoing government restrictions and support measures helped Shaftesbury weather Omicron-induced disruptions. The company’s net debt fell 1.1% from £748.5 million to £740.5 million.

Shaftesbury reported 60 commercial lettings with a rental value of £7.9 million, while rent levels rose 14% to a total value of £1.4 million.

The company also made significant investments, including the renovation of 165,000 feet of space and five acquisitions in Covent Garden, Chinatown, and Fitzrovia for a total of £18.5 million (excluding acquisition costs).

Management Commentary

Shaftesbury Chief Executive Brian Bickell said, “Robust occupier interest across all our uses and in each of our locations has continued throughout the period, our vacancy levels are trending lower towards pre-pandemic levels, and rent collection rates continue to improve.

“With the lifting of restrictions, visitors and the West End’s important working population are now returning. Together with an improving outlook for international leisure and business travel, there is now the prospect of an extended period of uninterrupted trading growth.”

Wall Street’s Take

Five days ago, Barclays analyst Sander Bunck kept a Sell rating on SHB with a 545p price target. This implies 10% downside potential.

Overall, SHB scores a Hold consensus rating based on one Buy, three Holds, and two Sells.

The average Shaftesbury price target of 612.50p implies 1% upside potential from current levels.

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