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It's still boomtime, says Shaftesbury
Hugo Duncan, Evening Standard14 Feb 2008
Shaftesbury, the owner of vast swathes of Carnaby Street, Chinatown and Covent Garden, today said the West End property market was booming despite the slowdown elsewhere in the country.
The company said rents were on the rise across its portfolio of shops, offices and flats as the popularity of the West End and shortage of space continued to drive prices. It also said successful trading over Christmas and the New Year for its tenants underpinned demand.
Vacant space across the portfolio has remained at "historically low levels" since October and the firm is looking to snap up shops and restaurants to add to its estate.
Shaftesbury has been the subject of stakebuilding by Newcastle United owner Mike Ashley and former Tottenham Hotspur director Paul Kemsley, who have a 10% holding through derivatives. It said it was not suffering from falling property values to the same extent as many of its rivals, and the shares rose 6p to 565p.
Chief executive Jonathan Lane said the economic outlook was "uncertain", and warned the company "cannot be immune from this general sentiment". But he added that demand for its buildings among tenants was strong and rents continued to rise thanks to "the strength of the economy in London's West End".
Property consultant Cushman & Wakefield said this week that the West End extended its lead as the most expensive office market in the world last year - costing three times as much as mid-town New York and twice as much as Paris.
Lane said: "Although we are conscious that any future deterioration in trading conditions could lead to an increase in tenant failures, we believe our properties, which are located in some of the most popular parts of the West End, will continue to attract demand.
"Although property yields are rising, resulting in falling values generally, investor appetite for freeholds in London's West End remains healthy and supply is always limited. Despite current unsettled conditions, recent transactions indicate that the values of well-located shops and restaurants in our chosen areas of the West End have not fallen as much as has been reported for investments in other locations and sectors."
