“Chinatown-owner Shaftesbury continues to defy the doubters of the UK commercial property market with a 12% increase in its net asset value per share and a 9% increase in its full-year dividend,” says Russ Mould, AJ Bell Investment Director.
“The net asset value (NAV) per share figure of 952p is way in excess of the 646p peak seen just before the financial crisis hit home in 2007, helped by lettings, lease renewals and rent reviews which came in at an average of 5.6% above their September 2016 valuation.
“Sceptics will point to an increase in the vacancy rate from 3% to 6% during the second half, although 0.8% of that space is under offer and 3.5% refers to three recently completed large projects.
“In addition, net asset value growth has accelerated again, even as investors worry about how the internet continues to put bricks and mortar retailers through the mangle – retail and restaurants represent roughly 70% of Shaftesbury’s income, compared to 17% from offices and 13% from residential property.
“This helps to reaffirm the value of Shaftesbury’s assets, which cover 14 acres of prime London property, including Chinatown, Soho, Carnaby Street and Charlotte Street, although the stock’s valuation remains a trickier issue.
“Persistent rumours, as yet unconfirmed, of a potential bid from Hong Kong billionaire and 20% stakeholder Samuel Tak Lee means the shares trade at a premium to net asset value, in marked contrast to other big Real Estate Investment Trusts (REITs) which have substantial exposure to London, retail clients or both. That said, Shaftesbury’s valuation does benefit from its lack exposure to the City and relatively limited new development programme.”
REIT | Share price | Historic NAV | Premium / (discount) |
Safestore | 457.3 | 314.0 | 45.6% |
Big Yellow | 816.0 | 607.6 | 34.3% |
Londonmetric Property | 181.2 | 149.8 | 21.0% |
SEGRO | 559.0 | 504.0 | 10.9% |
TRITAX Big Box | 146.4 | 133.3 | 9.8% |
A & J Mucklow | 516.0 | 471.0 | 9.6% |
Newriver | 315.3 | 292.0 | 8.0% |
Hansteen | 140.7 | 132.5 | 6.2% |
Shaftesbury | 997.0 | 952.0 | 4.7% |
Workspace | 936.5 | 1,014.0 | -7.6% |
Town Centre Securities | 303.6 | 359.0 | -15.4% |
CLS | 222.5 | 268.5 | -17.1% |
Capital & Counties | 256.9 | 339.1 | -24.2% |
Derwent London | 2,690.0 | 3,582.0 | -24.9% |
Great Portland Estates | 608.0 | 813.0 | -25.2% |
Hammerson | 516.0 | 771.0 | -33.1% |
British Land | 616.0 | 939.0 | -34.4% |
Land Securities | 917.0 | 1,432.0 | -36.0% |
INTU | 197.6 | 403.0 | -51.0% |
Source: Based on historic net asset value per share from company accounts, Thomson Reuters Datastream