Shaftesbury Rises as Demand for London Store Investments Climbs

Shaftesbury Plc (SHB), owner of more than 560 buildings in London’s West End, rose to the highest price in more than three months in London after demand from investors lifted the value of its properties.

The shares climbed as much as 3.1 percent to 634 pence, the highest since Aug. 8, after yields for its solely owned properties fell 24 basis points in the year through September, the London-based real estate investment trust said in a statement today. That led to a 9.5 percent increase in the value of its portfolio in neighborhoods including Soho and Chinatown to more than 2 billion pounds ($3.3 billion).

Yields for the best U.K. properties fell 11 basis points last month, the biggest monthly decline in three years, as buyers looked for returns that beat those from 10-year government bonds. Investors have set aside 25 billion pounds to acquire commercial properties in London, outstripping the 2.3 billion pounds of real estate available for purchase, Great Portland Estates Plc said in a Nov. 14 presentation to investors.

“There has been a noticeable increase in domestic and international visitors throughout the year,” Shaftesbury Chief Executive Officer Brian Bickell said in the statement. “Spending is increasing, encouraging retailers, restaurateurs and other leisure-related businesses to establish new ventures, particularly in and around the West End.”

Shaftesbury was up 2 percent at 627.5 pence at 10:47 a.m. in London. The shares have risen 12 percent this year, increasing the company’s market value to 1.58 billion pounds.

The company redeveloped or refurbished 9 percent of its total portfolio by floor space during fiscal 2013, according to the statement. Earnings per share fell 1.6 percent to 12 pence, the company said.

In the months ahead, Shaftesbury plans to refinance 60 percent of its 375 million pounds of bank facilities that are due to mature in 2016, according to the statement.

To contact the reporter on this story: Neil Callanan in London at ncallanan@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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