Rising rents for space in London’s West End helped offset the impact of soaring interest rates for landlord Shaftesbury Capital Plc.
The owner of swathes of London’s tourist hot-spots, from Covent Garden to China town, reported a 5.6% jump in rental income in the six months through June, according to a statement Thursday. That balanced the impact of higher interest rates which have pushed property yields higher, leaving the landlord’s portfolio value unchanged at £4.9 billion ($6.2 billion).
The return of international tourists and the gradual return to mostly office-based working has seen footfall in London’s main leisure districts begin to normalize after collapsing during the pandemic. Companies desire to move to buildings that are best equipped to help lure back workers has also helped support rising rents in the West End.
Shaftesbury Capital, formed via the merger of Capital & Counties and Shaftesbury Plc, said the retailers, restaurants and bars across its estate had reported sales that were 15% higher that pre-pandemic levels. It signed 89 new commercial leases at rents that were 6% higher than its valuers estimates while the 131 apartments it leased were at rents that were 13% higher than previously. Vacancy across the portfolio was 2.5% at the end of June.
“Despite macroeconomic uncertainty, the heart of the West End remains attractive with competition for space in our areas anticipated to remain healthy, underpinning rental growth prospects,” it said in the statement.
