Shaftesbury, a landlord responsible for properties in London’s West End and Covent Garden, has reported a significant loss for the year due to the ongoing retail crisis caused by the Covid-19 pandemic. In the year leading up to September, the company experienced a net loss of £699.5 million, a sharp decline from the £26 million profit reported the previous year. Net income from its properties also decreased by 24% to £74.3 million, with a 3.5% decline in like-for-like rental income. The company faced additional one-off charges of £21.9 million for expected credit losses and impairments.

The financial impact of the pandemic is expected to continue into the new year as Covid-19 control measures are anticipated to remain in place for a significant portion of the period. Despite this uncertainty, Shaftesbury successfully raised £300 million in October and has enough cash reserves to navigate through these challenging times.

However, there are concerns about the long-term consequences the pandemic will have on London landlords. Property values are expected to remain suppressed, and the high number of struggling retailers could lead to more Company Voluntary Arrangements (CVAs) and administration filings. Despite these concerns, Shaftesbury remains hopeful for the future, stating that it is confident its portfolio will eventually regain growth and prosperity once the global and local disruption caused by the pandemic subsides.

Meanwhile, the company faces significant pressure and is taking steps to support its occupiers both operationally and financially. This includes providing rent waivers, utilizing rental deposits, implementing payment plans, and restructuring leases. However, the collection of contracted rent has been challenging, with Shaftesbury only able to collect 53% of the rent for the six months leading up to September 30. Approximately 34% of the rent has been deferred or waived, leaving 13% outstanding. Starting from October 2020, the company has transitioned most commercial tenants to monthly rents in advance to mitigate further financial challenges.

Additionally, Shaftesbury has increased collaboration with neighboring estates and stakeholders to address operational matters and engage in marketing efforts that will encourage visitors to return to the West End when it is safe to do so.

Useful Links:
1. Shaftesbury Official Website
2. Mayor of London Official Website