Shaftesbury AR 2017 LR

STRATEGIC REPORT OVERVIEW Shaftesbury Annual Report 2017
Focus
on restaurants,
leisure and retail
Mix of uses, focussed on
restaurants, leisure and retail
over lower floors with offices
and residential on upper floors.
Restaurants,
leisure and
shops generate
70% of current
annualised
New concepts and
independents favoured
Careful tenant selection is critical to ensure our areas remain
popular and attract growing footfall. We favour new concepts,
independent operators and international retailers making their
UK debut and prefer mid-market, innovative formats. Our shops
are neither luxury nor value-led and our restaurants typically are
neither Michelin-starred nor low-end fast food.
Long history of demand
exceeding availability
In the West End, there is a long history of occupier demand for
restaurant, leisure and retail space exceeding availability, which is
often restricted by planning policies.
Consequently, rents for these uses, in our areas, have not
demonstrated cyclical nor structural decline, even in times of
major economic uncertainty. Over the past ten years, ERV for
these uses has demonstrated like-for-like annualised growth of
3.8%, despite rental levels remaining broadly flat during the global
financial crisis. Vacancy levels for these uses over the same
period have averaged 3.0% of ERV 1,2 .
LIKE-FOR-LIKE ERV GROWTH¹
RESTAURANTS, LEISURE AND RETAIL
160
140
120
income 1 ERV (cumulative, rebased to £100 at 30 September 2007)
Our 1.1 million sq. ft. of restaurant, leisure and retail space
provides 70% of total current income 1 . It comprises 282
restaurants, cafés and pubs and 302 shops, mainly of medium or
small size. The variety of interesting dining, leisure and retail
brands gives our destinations a particular identity and provides
visitors with an experience unmatched by other areas.
EVOLUTION OF USES OVER TIME
(% OF ANNUALISED CURRENT INCOME¹)
7
23
29
Residential
Offices
Restaurants and leisure
13
17
37
100
10-year CAGR: 3.8%
80
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Limited obsolescence
An important aspect of restaurant, leisure and retail
accommodation is that we provide it in shell form only. Tenants
are responsible for their fit-out, with no capital contribution
from us. When tenants vacate, we re-let the shell of space
without incurring significant refurbishment costs, limiting our
exposure to obsolescence.
Upper floors - a mix of offices
and residential
The space above our shops and restaurants comprises small
offices, residential, or a mix of both. A local working population
and a residential community are essential elements of the
character and economy of our areas, bringing added life and
vibrancy, and providing regular customers for our shops,
restaurants, cafés, and leisure operators.
41
Shops
33
2007 2017
1 Wholly-owned portfolio
2 EPRA vacancy
See also pages 42 to 47
21