Shaftesbury AR 2017 LR

STRATEGIC REPORT OVERVIEW HOW WE MEASURE SUCCESS Shaftesbury Annual Report 2017
OPERATIONAL MEASURES
SUSTAINED RENTAL GROWTH 2,3 MAXIMISE OCCUPANCY 4
Objective
Result
Achieve growth in ERVs Commercial lettings/renewals/rent reviews 4 :
+6.7% vs ERV at September 2016
Objective
Let vacant space
quickly
Result
1.5 months' average letting time 3
60
80
63
78
68
84
78
92
81
100
128
119
106
103
94
86
110
139
114
145
10 year average: 2.7%
2.9% 2.9%
2.6% 2.8% 2.3%
1.4%
2.7%
1.6% 1.6%
6.0%
2.5%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Annualised current income (£m) ERV (£m) EPRA vacancy (% of ERV) Thomas Neal’s Warehouse and Central Cross
Sustained growth in contracted and potential rents is
fundamental to long-term income and value creation.
Achieving rents above ERV is a KPI. In our leasing activity, we aim to establish
new rental tones which exceed ERVs assessed by our external valuers. This
improves our portfolio’s reversionary potential by generating rental evidence
on individual properties, which is then compounded across our nearby
holdings. Typically, we crystallise this rental potential into contracted income
over a three - five year period. Importantly, the level of lease incentives
granted to tenants remains modest.
Our strategy has delivered sustained growth in annualised current income
and rental values over many years. The 10-year like-for-like compound annual
growth rate in annualised current income and ERV of our portfolio has been
4.9% p.a. and 4.6% p.a. respectively, with growth in current income every year.
The reversion currently stands at £30.4 million, 26.6% above annualised
current income.
Maximises income generated by the portfolio.
Letting space quickly is a KPI. With sustained tenant demand, vacancy levels
are typically low. Average EPRA vacancy 4 over the past ten years has been
2.7% of ERV. At 30 September 2017, EPRA vacancy was 6.0%, which
included 3.5% in respect of space recently created at our Thomas Neal’s
Warehouse and Central Cross schemes.
1 An alternative performance measure. See page 140
2 Data includes acquisitions
See page 94 for how these measures form part of the bonus for the year ended 30 September 2017
3 Including our 50% share of property held in joint venture
4 Wholly-owned portfolio
See pages 40 to 41 for more information on vacancy, Thomas Neal’s Warehouse and Central Cross
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