London landlord Shaftesbury to raise £300m as Covid losses mount

Shaftesbury, the central London landlord that owns Chinatown and swathes of Soho and Covent Garden, has announced emergency plans to raise almost £300m to help it survive the coronavirus crisis as tourists and workers stay away from the West End.

The property firm is still struggling to collect rent payments from its retail, restaurant and bar tenants, who have had persistently lower footfall and trade in the capital.

Shares in the company fell 15% to 415p on Thursday, making it the biggest faller on the FTSE 100, after it announced intentions to raise £297m from shareholders to boost its finances, pay some debts and make investments once the outlook for commercial property improves.

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Shaftesbury, which owns 16 acres of land in central London, blamed government restrictions designed to limit the spread of coronavirus, and uncertainty about their duration, for the continued slump in footfall and trade in the West End, a district that has a low number of residents and relies on office workers and international tourists.

Brian Bickell, the chief executive of Shaftesbury, said: “The capital raising 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.”

Shaftesbury said in September that it had received less than half (44%) of rent for the six months to 30 September, and had offered new lease terms to struggling tenants, including rent waivers, shorter leases and monthly, instead of quarterly, rental payments.

It added last month that it was struggling to re-let flats, with a fifth of its 622 residential properties lying empty, after many of their previous occupants, such as international students and young professionals, returned to their home countries at the start of the pandemic.

Shaftesbury is offering its new shares for 400p, an 18% reduction on Wednesday’s closing price of 487p.

The landlord said it had been given commitments by shareholders who own 52.2% of the company’s stock they would take part in the fundraising.

Analysts at the stockbroker Peel Hunt said Shaftesbury’s cash call had come “as a bit of a surprise, especially its size”.

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