Shaftesbury Capital H1 2025 Earnings Report

Shaftesbury Capital EPS Results

• Actual EPS: GBX 2.20
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Shaftesbury Capital Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Shaftesbury Capital Announcement Details

• Quarter: H1 2025
• Date: 7/29/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, July 29, 2025
• Conference Call Time: 3:30AM ET

Shaftesbury Capital (LON:SHC) ("Shaftesbury Capital") is the leading central London mixed-use REIT and is a constituent of the FTSE-250 Index. Our property portfolio, valued at £4.8 billion, extends to 2.7 million square feet of lettable space across the most vibrant areas of London's West End. With a diverse mix of shops, restaurants, cafés, bars, residential apartments and offices, our destinations include the high footfall, thriving neighbourhoods of Covent Garden, Carnaby, Soho and Chinatown. Our properties are close to the main West End Underground stations and transport hubs for the Elizabeth Line. Shaftesbury Capital shares are listed on the London Stock Exchange ("LSE") (primary) and the Johannesburg Stock Exchange ("JSE") (secondary) and the A2X (secondary). Our purpose Investing to create thriving destinations in London’s West End where people enjoy visiting, working, and living. Our values We have a set of values that are fundamental to our behaviour, decision making and the delivery both of our purpose and strategy: Act with integrity; Take a creative approach; Listen and collaborate; Take a responsible, Long-term view; and Make a difference.

Shaftesbury Capital H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We delivered strong first-half results with like-for-like valuation up 3%, rental income up 8%, underlying earnings up 16% and an increased interim dividend of 1.9p per share.
• Positive Sentiment: Net debt was reduced from £1.4bn to £0.8bn, lowering loan-to-value to 17% and cutting net debt to EBITDA to 6x, providing significant liquidity and balance sheet flexibility.
• Positive Sentiment: The £2.7bn long-term partnership with the Norwegian Sovereign Wealth Fund (NBIM) on Covent Garden highlights the portfolio’s fundamental value and expands investment capacity.
• Positive Sentiment: Leasing activity remained robust with 193 new and renewed transactions, achieving rents 9% above ERV and 16% ahead of passing rates, while vacancy stayed low at 2.5%.
• Positive Sentiment: Management remains confident in medium-term targets of 5–7% rental growth and 8–10% accounting returns, driven by stable yields, active asset management and West End fundamentals.

Presentation

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

I've got the thumbs up from the back of the room, which means the telephones are online. So I think we can kick off. Good morning. Thank you all for coming. I know you've got a very busy day today as we sort of kick off the interim results season in our sector.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Welcome. Normal agenda for today. We are really pleased with performance in the first half and delighted to present a good set of results to you all. I'm going to begin with a little bit of an overview. Sital will then take you through the financial review.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

I'll give you a little bit more detail about what's going on in the portfolio, and then we'll finish with a summary and outlook. And then Andrew and Michel will join for Q and A. So a very successful first half. We've delivered strong performance with an increase in rents, values, income and dividends, while strengthening our financial position and creating significant optionality for the group. You will all be aware that macroeconomic issues continue to impact the economy, and these are well documented.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

However, I'm pleased to report that conditions across the West End's occupational market remain very active indeed. And we continue to see positive trends in footfall and sales across our Prime West End portfolio, with the team successfully leasing well ahead of ERV with excellent levels of activity, limited vacancy and a strong pipeline. And during the period, we're pleased to have formed a GBP 2,700,000,000.0 long term partnership on Covent Garden with the Norwegian Sovereign Wealth Fund, NBIM, which highlights the fundamental value and attractiveness of our portfolio. And we continue to expand the portfolio with £55,000,000 of acquisitions during the period, and we have a number of properties currently under review. With enhanced liquidity, we're well positioned to take advantage of market opportunities as they arise.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So the West End continues to thrive as the premier destination for culture, retail, dining, leisure and entertainment, attracting some 200,000,000 visitors a year. Shaftesbury Capital's irreplaceable portfolio of properties located at the heart of the West End provides the prospect of high occupancy, low capital requirements and reliable, growing long term cash flows. Our deep customer relationships and creative approach enable us to achieve value creation in must have locations across the West End. So just turning to some of the highlights of the results. Valuation increased 3% like for like to GBP 5,200,000,000.0, and this was led by a 2.9% increase in ERV with stable valuation yields.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

NTA increased 3.3%, resulting in total accounting return of 4.2 for the period, which is in line with our medium term targets. Rental income increased by 8%, with underlying earnings up 16% for the half year. The Board has declared an interim dividend of 1.9p per share. We have a strong balance sheet and access to significant liquidity with low leverage. And I think the performance over the period demonstrates the exceptional qualities of our portfolio, delivering growth in cash rents, dividends, ERV and valuation.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So I'll hand over to Sital just to take you through the detail of the financial review.

[Situl Jobanputra, CFO & Director at Shaftesbury]

Thank you, Ian. Good morning, everyone. As you've heard, there has been significant progress across the business. H1 financial performance was positive with growth in rental income, earnings, dividends, valuations and net tangible assets. We strengthened our balance sheet and enhanced the group's financial flexibility.

[Situl Jobanputra, CFO & Director at Shaftesbury]

Following the sale of a 25% interest in Covent Garden to Norgaz Bank, we present the numbers here on a proportionately consolidated basis. As a transaction completed midway through the period, Covent Garden is effectively included at 75% from Q2 onwards. The IFRS numbers set out in the results announcement consolidate Covent Garden in full with a one line adjustment for the noncontrolling 25% interest. During the period, there was a gross cash inflow to the group of GBP $574,000,000. So starting with the income statement.

[Situl Jobanputra, CFO & Director at Shaftesbury]

Gross rents increased to GBP 98,700,000.0, up 8.2 like for like, reflecting a successful period of leasing and asset management. In aggregate, commercial lettings and renewals were 10% ahead of ERV and 24% ahead of previous passing rents. Management fee income in respect of the 25% of Compton Garden owned by our partner forms most of the other income of £1,100,000 Administration costs of £20,400,000 reflect the effect of ongoing efficiencies and an increased share option charge, which was up £2,500,000 compared with H1 last year. Further income growth and operational efficiencies are targeted for H2 and future periods. Finance costs have been reduced to £23,700,000 as a result of interest income on cash and lower net debt.

[Situl Jobanputra, CFO & Director at Shaftesbury]

Underlying earnings increased by 16% to £40,600,000 equivalent to 2.2p per share. We've increased the interim dividend to 1.9p. Our leasing and asset management activity contributed to an increase in ERV of 2.9% over the period to £260,800,000 As illustrated in the chart, there's the opportunity to grow passing rents significantly. There is embedded reversion in our portfolio and good visibility on the income growth potential in each of our locations. In particular, 18,700,000.0 of income is contracted or relates to rent free periods, the majority of which will convert to running income over the coming months.

[Situl Jobanputra, CFO & Director at Shaftesbury]

Turning to the balance sheet. The market value of the portfolio under management was up 3.1% like for like to £5,200,000,000 Net debt has been taken down from 1,400,000,000.0 to £800,000,000 on a group share basis and results in loan to value of 17%. NTA per share was up 3.3% over the period to 207p, driven primarily by the valuation movement. The main driver for the increase in property valuations was rental growth. ERV was up across all sectors and in all of our states.

[Situl Jobanputra, CFO & Director at Shaftesbury]

The equivalent yield is unchanged at 4.5% overall and 4.6% for commercial assets. Average ERV for the portfolio is £95 per square foot and overall valuations are now at $18.93 pounds per square foot. We estimate that customer sales are some 30% higher in nominal terms than 2019 levels, significantly outstripping ERVs. This underlines the relative affordability and attractiveness of our estates. The balance sheet is in a strong position with low leverage and access to significant liquidity.

[Situl Jobanputra, CFO & Director at Shaftesbury]

As well as reducing loan to value, net debt to EBITDA has been enhanced, now at a multiple of six versus 11 times previously. With leverage well within our indicated range, this provides flexibility to deploy proceeds towards growing our business through investment in existing assets and new opportunities, both in Covent Garden and across Chinatown, Soho and Carnaby. During the period, we repaid part of the Canada Life term loan and are positioned in due course for the repayment of GBP $275,000,000 of exchangeable bonds, which mature in 2026. We will continue to review financing opportunities, taking advantage of the attractive credit profile of the group. So to summarize, there has been strong financial performance in the first half, and we have enhanced flexibility.

[Situl Jobanputra, CFO & Director at Shaftesbury]

We will continue to focus on our priority areas: one, rental growth and further efficiencies resulting in higher earnings and dividends two, deploying capital accretively and three, maintaining balance sheet strength and flexibility. And with that, I will now hand back to Ian.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Thanks, Idol. A little bit of a recap on the portfolio. As you know, we've got an impossible to replicate portfolio of properties. These are some of the most iconic destinations in London's West End. They're focused on Covent Garden, Carnaby, Soho and Chinatown.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

It's a GBP 5,200,000,000.0 portfolio under management. It comprises of approximately 2,700,000 square feet of lettable space across about six forty mainly freehold buildings and there's some 1,900 individual tenancies. The portfolio is broadly one third retail, one third F and B and the balance is in the upper floors, which offer office and residential accommodation. We have a diverse occupier mix and therefore, have a wide range of income streams and a wide range of unit sizes and rental tones. As I mentioned, leasing activity has been particularly positive with strong occupational demand.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

We're noticing that tenants tend to prioritize the best locations, and we've achieved leasing success right throughout the portfolio with continued ERV growth. This slide shows some of the new brands that the team has introduced, and they range from independent to global concepts. They're generally attracted by the seven days a week footfall and trading environment that we offer. So in total, some 193 new leasing transactions completed, 19,200,000.0 of contracted rent, about 9% ahead of the December 24 ERV and pleasingly 16% excuse me, ahead of previous passing rents. Portfolio vacancy is low at 2.5%.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

The team has takes a very active and creative approach, which is informed by a very deep knowledge of what's going on in the West End, and it does position the company to deliver rental growth through converting the portfolio's embedded reversionary potential into contracted income. A little bit about the subsectors, very strong retail market. We've recorded particularly strong demand across the range of activities with generally positive trading conditions. We've noticed very good performance from some of the more productive categories such as premium, lifestyle and accessories. And in recent months, we've welcomed a number of new brands to Carnaby Street, which we're particularly pleased about as we enhance and evolve the offer there.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Charlotte Tilbury will open a new flagship on Carnaby Street later this year, and this follows their recent upsizing to a new flagship on the corner of the Piazza At Covent Garden. Covent Garden, in turn, continues to attract high quality brands, including Nespresso, Thula, to name but a couple. And these were introduced during the first half of the year. And all of this has contributed to a 4% improvement in retail ERV across the portfolio. We're home to around about three ninety one individual food and beverage outlets.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

I think operators are attracted by the vibrant locations, the pedestrian friendly environment that we provide and the managed estate feeling that they have by being one of our customers. There've been a number of signings across Covent Garden. These include Harry's Restaurant and Bar, which will open on a flagship site at the Piazza, and there continues to be strong demand in Soho, new sign many new signings through the period. And in Chinatown, we've introduced more variety to the area. We've increased the Pan Asian offer at a range of different price points.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So across the portfolio, about 21 new lettings in total and renewals, signed about 18.8% ahead of December 2024 ERV. It's those vibrant locations and the quality of accommodation and management that continues to generate demand for office leasing. Carnaby And Covent Garden offer high amenity value, excellent environmental credentials, and we're continuing to lease in excess of GBP 100 a square foot with positive demand. During the period, we also entered into 100 new residential transactions, and these were achieved at rents about 3% ahead of previous passing levels. We've got a strong pipeline of asset management opportunities, refurbishment initiatives across the portfolio.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

About 4.5% of ERV is currently under refurbishment, and it's expected that these properties will be delivered in the coming twelve to eighteen months. We also continue to rotate assets within and out of the portfolio as we continue to enhance the quality of the overall portfolio. And this year, we disposed of around about GBP 12,000,000 worth of assets whilst investing approximately £55,000,000 in target acquisitions in Soho and Covent Garden. As I mentioned earlier, we've got a number of properties currently under review. As you know, during the period, we did introduce sovereign capital to the Covent Garden portfolio and partnering with NVIM leverages our operational expertise and our property portfolio as we enhance investment and expansion opportunities in years to come.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So in summary, we've had a successful first half of the year and positive momentum is being carried into the second half. Notwithstanding those macroeconomic challenges, the West End continues to perform strongly with high footfall and low vacancy. There are excellent levels of activity and a strong leasing pipeline. Our partnership with NBIM brings together two long term investors with shared confidence in and ambitions for growth for the growth of Covent Garden. Shaftesbury Capital's irreplaceable portfolio is anticipated to deliver sustainable income and value growth.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

And our active approach and the positive market fundamentals of the West End give us confidence in our medium term targets of 5% to 7% rental growth. And with stable yields, we anticipate that this should deliver accounting returns of 8% to 10%. With that enhanced liquidity, we will pursue accretive opportunities for investment and expansion of assets under management. And backed by a strong balance sheet, we're well positioned to grow the business and take advantage of market opportunities in the West End. So that concludes the formal remarks.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Thank you for listening. For those of you that are on the lines, if you'd like to ask a question, please let the operator know and they'll let us know, and we'll come to you. But if anybody has a burning question from the room, we'd be delighted to answer it. Who'd like to go first? Stunned silence. Matt.

[Matthew Saperia, Research Analyst at Peel Hunt]

Good morning. It's Matt Spear from Peel Hunt. One quick one from me. You talked about introducing Charlotte Tilbury to Carnaby. Clearly, there's already some momentum in terms of sort of reenergizing it and some sort of re tenancy going on there.

[Matthew Saperia, Research Analyst at Peel Hunt]

Just how important could that addition to Carnaby be to sort of, I guess, push on the next phase of the re tenanting of Carnaby? I mean the ERV growth has obviously been very strong in the second half. I'm guessing there is good momentum beyond that.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Yes, look, we're really pleased with progress so far. I mean the response from the customer from our tenants has been really positive to what we're trying to achieve, which is to introduce forward looking brands in categories that are going to generate higher sales densities. And Charlotte Tilbury is a great example of that. We're particularly pleased that that's an upsizing from within the overall portfolio. And that is a theme that we're seeing across the all three of our locations, where a number of tenants are taking second or third locations or introducing additional brands from their stable.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

But in addition to Charlotte Tilbury, we've had four or five brands have opened up on the South Southern End Of Carnaby. I'm sure you shop at Farm Rio quite regularly and you'll be a major user of Pure Soul, a really cool K beauty brand. I'm sure it's right up your street, Matt. But we're really excited about that. And you can see that the consumers have got much more choice now.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

And also some of the existing customers like Mac, they're opening new concepts as well. And I think when you see the changes at Kingly Court and over the medium to longer term, the improvements that the team have got planned for the streetscape, I think it will be a really exciting destination and we're really, really looking forward to good rental growth over the next three to five years. Thanks.

[Zachary Gauge, Equity Research Analyst at UBS Group]

Good morning everyone. It's Zachary Gage from UBS. Couple of questions. On the like for like rental growth, just saw retail was marginally negative. Obviously, a bit of a surprise if could just touch on what some of the moving parts were in the like for like number.

[Zachary Gauge, Equity Research Analyst at UBS Group]

And then on the debt side, obviously, you're expecting to pay the exchangeable bond with cash. You've still got the PPN, pounds 163,000,000 at 2.7% expiring. Next year, if you could just touch on what the plans are for that and what expect the interest rate might be if you do refinance that or pay it down with cash? And also, with a substantial cash balance, if you could touch on what your sort of interest rate is, do we just assume sort of base rate minus a little bit of margin for that going forward? Thanks.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

I'll answer the easy I mean, the retail market is very strong, so I wouldn't read too much into the small technicalities of that. It's really a function of what goes on in the particular period. But I would say that I'm sure Michelle would agree, but it's probably the strongest retail market we've seen now, and that's been a feature for the last eighteen months. And that continues to generate very strong demand for our three locations. Been particularly interesting at the moment in the new brand lineup that we're anticipating or the additions we're anticipating at Carnaby Street.

[Situl Jobanputra, CFO & Director at Shaftesbury]

Yes. On the balance sheet, great to be in the position that we're in because it gives us a lot of flexibility and a lot of optionality. And at the same time, we have access to a number of different markets, which is very encouraging as well, and spreads seem to be coming in, which is a good indicator. So in terms of the specifics on the exchangeable bond, our assumption is or our base case is that we will repay that next year. In the meantime, it's a good piece of financing.

[Situl Jobanputra, CFO & Director at Shaftesbury]

It's 2% cash coupon. On the private placements, remember, they sit within the common garden business, which we now own 75%. That market is very much open. So whether it's the bank market, PP market, other markets for Common Garden, we think that's absolutely accessible. So expect to hear more on that over the coming months.

[Situl Jobanputra, CFO & Director at Shaftesbury]

But we think Comgarden has very low leverage, so it will be a very attractive credit for any lender. And as far as the cash is concerned, we generate interest income marginally below the base rate.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Anybody on the telephone?

[Executive]

We have one person on the telephone, so I'd like to hand over to Saskia.

[Operator]

Thank you. And we do have a question from Rob Jones from BNP Paribas. Please go ahead.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

Good morning. Thank you.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

I had three. One was on do you want me to go all three or do one at a time?

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Go through all three and then give us time to think about them, Rob.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

Good stuff in. All right. So look, the first one is on reversionary potential. You talked about or you talked about the embedded reversionary potential and converting that into contracted income. Appreciate you made the point that you've got customer sales up 30% in nominal terms versus 2019, ERV is obviously down too.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

And given your reversion of 25% or a bit less, say 21% if I hold portfolio vacancy constant, I could quite easily take the view that we can capture all that reversion and rents in nominal terms are still more affordable from a tenant perspective given how much retailer sales have moved on in the last five point five, six years. Is there a bit more of a nuance to that though in thinking what has tenant profitability done over that time since 2019? And therefore, are we still super comfortable in the capacity for that tenant to pay up in terms of capturing that reversion and obviously marking the portfolio to market over the next coming years? Second question was around balance sheet. Obviously, appreciate leverage down substantially post the €600,000,000 Nordisk transaction.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

It's naturally, as it is always the case for your portfolio, not that easy to reinvest capital because you're very selective about your opportunities. They only come up on a relatively irregular basis in terms of acquisitions, for example. So should we think about the portfolio leverage as remaining at that six, seven, eight times net debt to EBITDA in the shorter term with a sub-twenty percent LTV? Or is there genuine opportunity, say, on a twelve month view to reinvest? And then the final one, Sithol, just a clarification.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

18,700,000.0 of contracted uplifts, you said as rent freeze burn off. And think you said in the coming months. Did I get that wrong in terms of that time frame?

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Thanks very much, Rob. Good questions. I think the first one is the embedded reversion is really the difference between passing rent and the ERV effectively. So the ERV for the portfolio under management I don't know why I'm looking at the speaker, but the ERV for the portfolio under management is now about GBP $260,000,000. So obviously, the ERV should continue to grow.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

If you look at the long term trend over the last thirty odd years or so, barring a hiccup during COVID, you generally had rental growth for hospitality and retail in the West End of 3% or 4%. It's really a function of London GDP plus inflation. So it's a very resilient asset class. And the ERV is not a forecast. It's what the values think the rent should be today if everything was available to let.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So the difference between passing at 02/25 and February, that should burn through relatively quickly. And the ERV should continue to grow. What we've found over the years is that by an active approach to managing the mix, then you'll get an ERV growth trajectory above that long term average. And that can be very high during a period of repositioning. I think in the early days of Covent Garden, we saw ERV growth of 12% to 14 over sort of a two, three year period.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

And we're seeing a similar sort of opportunity in Carnaby Street whilst we're still delivering quite significant ERV growth, as you've seen from the numbers across all parts of the portfolio. But it takes a while for that to be recognized by the valuers in the valuation. So you should get top line ERV growth over time, and that should be captured relatively straightforwardly in the reversions as leases fall due. So we have about 20% of the leases are mark to market, if you like, every year. So that sort of also answers the last question, where some of that reversionary income is already contracted through rent freeze we've already entered into.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So on top of the GBP $225,000,000, you'll get about GBP 18,000,000, which will burn through quite quickly, probably over the next twelve to fifteen months or so. The balance of that to the $260,000,000 will take a little bit longer. So I think we're in really good shape. And if you look at the RV improvements on the transactions over the last two years, they've consistently been ahead of the mean and very good first half this year. The other component of the improvement in nominal sales relative to ERV it's quite interesting.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

It generally means that obviously, some of the cost base has gone up in different parts of the portfolio for occupiers, but it means that the portfolio as a whole is more affordable. That's good for us because we're trying to pick this growth up over the medium to long term rather than just on an annualized basis. So we're really pleased with the trajectory of the portfolio at the moment.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

To provide a bit more color on that Can I ask a quick follow-up?

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Yes.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

It was just on in your point you made around 3% to 4% kind of long term London retail hospitality rental growth. When I think on page three about your of your press release about the comment where you say confidence in target 5% to 7% ERV growth, should I think of the delta between the 3% to 4% and the five to 7% as your London micro location's ability to curate a mix that drives stronger growth as the drivers between that delta?

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Well, I'd like you to give us all the credit that, Rob, but I don't think that would be fair. I mean the West End is actually doing quite well at the moment. So I think the West End currently is above the mean because vacancy has reduced so significantly over the last eighteen months. You've gone from very high vacancy levels to below 5% now for the premium locations. So the whole of the West End is doing well.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

I think with my colleagues sitting here, I have to give them some credit for the outperformance to the West End mean. But that's what we try and do, and that's really by being quite careful about the environments that we curate and trying always to find the best in class brands that are going to have the most resonance with the consumer. And that's worked very well within our location so far, whether it's introducing a broader range of Asian cuisine in Chinatown or whether it's introducing higher value, higher density cosmetics or in Covent Garden, we've seen very high sales densities as a result of introducing premium watch and jewelry. So there's lots of things that we can do. And with the coverage that we've got and that customer relationship and knowledge we've got about the market and the consumer, I think we're well positioned to outperform the long term trend and also outperform the short term West End trend, which is currently the case.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

So I think your other question was about balance sheet leverage and To

[Situl Jobanputra, CFO & Director at Shaftesbury]

provide a bit of input for your modeling as well, Rob, that comment about contracted and rent freeze, you should assume something like two thirds of that will burn off over the next six to nine months. Onto the balance sheet. Yes, we've acquired GBP 55,000,000 or so of assets. We're looking at a few other things. So the kind of the pipeline is quite good.

[Situl Jobanputra, CFO & Director at Shaftesbury]

I think more broadly on leverage, the kind of starting point is that we would like to maintain net debt to EBITDA well below 10%. We're at 6%. That gives us quite a lot of room. We've got a kind of a printed, if you like, LTV upper limit of 40%. I think in the near term, that's more likely to be 20% to 30% and probably in the lower half of that.

[Situl Jobanputra, CFO & Director at Shaftesbury]

And what we're actually thinking about as we kind of approach balance sheet and liquidity management is also solving for a finance cost number, which is consistent with earnings growth. So it's all of those things.

[Robert Jones, Operations Oversight Analyst at BNP Paribas]

Sure. Crystal, thanks so much guys.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Okay. Thanks. Very good questions. Any more on the phones or? Think that means no.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Would anybody else like to ask a question in the room? No? So I think that's great. We're just over half an hour, which I think is nearly a record. And we know you've got a really busy day and a busy couple of weeks before you just spear off whatever you're doing in the summer.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

Thank you very much for coming. Really appreciate your attendance and your support. If you do have any follow-up questions, then obviously, you know where we are. And you're all very welcome to come and see us in Covent Garden and Carnaby Street and Chinatown anytime. We live above the shop.

[Ian Hawksworth, CEO & Executive Director at Shaftesbury]

It's quite a nice shop. It's called Tiffany. But we're always available to show you around. And if you'd like to, walk the estate, we're delighted to, host you. Thank you very much for attending.

Participants

Analysts

• Ian Hawksworth, CEO & Executive Director at Shaftesbury
• Situl Jobanputra, CFO & Director at Shaftesbury
• Matthew Saperia, Research Analyst at Peel Hunt
• Zachary Gauge, Equity Research Analyst at UBS Group
• Executive
• Robert Jones, Operations Oversight Analyst at BNP Paribas