The major retail and leisure investor in London’s West End, Shaftesbury PLC, a Real Estate Investment Trust, has this week issued a trading statement for the period 1 April 2021 to 20 August 2021.
The company focuses on central London locations close to a renowned concentration of world-class attractions with shopping and leisure destinations, but like other retailers, these outlets have suffered throughout the Covid pandemic.
The company announces that West End footfall and trading is recovering apace, that the operating environment is gradually improving.
The statement records that West End footfall has recovered to 50%-60% of pre-pandemic levels as Londoners, domestic day trippers and staycation visitors are returning in growing numbers.
A return of the West End’s “exceptionally large” office-based working population is anticipated from early autumn, while the company’s hospitality and leisure occupiers continue to enjoy a strong recovery in trading levels. Visitors are currently focussing their attention on dining, leisure and socialising.
The company’s tenant occupiers are reporting improving trade, particularly at weekends, while the company is seeing continuing recovery in tenant demand for premises across all uses and a significant reduction in vacancies.
Vacancies on a downward trend
The availability of to-let space as of 31 July 2021 is down to 4.6%, with vacant space continuing to go under offer with a further decrease to 4.1% by 13 August 2021, reflecting continuing leasing momentum.
Hospitality and leisure demand has improved over the reporting period, reflecting confidence in the long-term prospects for West End locations, the company says.
There’s been a healthy occupier interest for shops, including online retailers looking for physical space in these locations. It seems there’s a trend to providing an all-round consumer experience, interaction and engagement, to further enhance brand identities.
Demand for premises increasing
Office enquiries, viewings and lettings have also continued at a steady pace, the company reports, as occupiers prepare for the return of their workforces and look to improve the quality of their workspace. “Assemble”, our fully fitted option, is proving particularly popular, especially with smaller businesses, the company says.
There’s also been a “Marked and sustained increase in demand for our apartments from a broad range of occupiers; rents have now stabilised.”
“Letting terms are generally in line with ERVs and our expectations, but there is a greater degree of short-term income uncertainty in those retail leases which have a significant element of turnover-related rent.
“Rent collection is recovering and expected to improve further now pandemic restrictions have been relaxed”, says the report.
Brian Bickell, Chief Executive, commented:
“I’m pleased to report positive momentum in recent months, with footfall and trading recovering, an improving operating environment and significantly reduced vacancy across our villages. West End footfall has, to date, recovered to 50-60% of pre-pandemic levels, as Londoners, domestic day trippers and staycation visitors return in growing numbers.
“We expect that early autumn will see a return of the West End’s exceptionally large office-based working population, which has always been an important contributor to our local weekday economy.
“The long-term curation we bring to our central, bustling villages, with its focus on differentiated, mid-market choices targeted primarily at a domestic audience, continues to attract both visitors and new occupiers.
“The progress we have seen towards a return to normal patterns of activity over the period, and improving medium-term prospects, have been catalysts for a strong recovery in confidence and leasing activity, both for commercial and residential accommodation across our locations.
“The momentum of the last four months is providing a sound platform for the continuing revival of the West End in the important months ahead, leading up to Christmas and into the New Year, and the prospects for a return to pre-pandemic patterns of life and activity.”