MARKET REPORT: Property shares are on the move as Shaftesbury and Southgate enjoy big increases in portfolio value
The red hot London property market has been showing signs of overheating of late with experts suggesting that the planned General Election in May is dissuading potential buyers from making a decision to buy until they see who wins.
Two quoted property groups based in the capital yesterday revealed exactly how they have profited from the boom by reporting big increases in the value of their properties.
Shaftesbury, the FTSE 250 owner of London’s Carnaby Street and Chinatown, soared 44p to a record 806p after announcing its net asset value had increased by 25.7 per cent to 713p a share last year, well ahead of analysts’ forecasts, thanks to high occupier and investment demand for the retail, restaurant and leisure properties. The value of its estate jumped £426.6million to £2.6billion.
Overall, the portfolio delivered like-for-like capital growth of 21 per cent and the like-for-like portfolio cumulative annual rate over three and five years has been 11.8 per cent and 11.3 per cent. Buoyant chief executive Brian Bickell said he anticipates continuing strong growth in London’s working and residential population.
Shaftesbury is paying a final dividend of 6.6p, making a total of 13.1p per share. That should please all shareholders, including Hong Kong billionaire Samuel Tak Lee who sits on a 5 per cent stake.
In 1994 he bought the Langham Estate, which covers 14 acres between London’s Soho and Mayfair, for £47million. His stakebuilding has prompted growing speculation that he will one day launch a full-scale bid.
Shaftesbury now has a market capitalisation of £2.2billion, a fair old mouthful even for a billionaire.
Southgate, North London-based and family-owned residential landlord Mountview Estates advanced 620p or 7 per cent in a thin market to an all-time peak of 9295p following excellent interim results, including an 11 per cent leap in net asset value per share to 7100p.
Pre-tax profits rose 57.6 per cent to £20.8million on turnover 28 per cent higher at £36.9million. A full independent valuation of its trading stock at the end of September showed its portfolio is now worth almost £666million, more-than-double current book value of £318million, not far off its market capitalisation of £362million.
Mountview is more than 53 per cent owned by a concert party consisting of certain Sinclair family members. Christmas certainly came early for them as shareholders were awarded an interim dividend of 100p, double the previous year’s payment.
The founding family’s 53 per cent ‘concert party’ altered its agreement about the ‘terms of conduct’ with the company during 2013. The statement then mentioned ‘including the event of an offer being made for the Company’.
Chief executive and 13.8 per cent shareholder Duncan Sinclair joined the company in 1977 and is no spring chicken. He is the last family member in the senior ranks and could perhaps soon decide to stand down and sell out to a cash-rich predator.
As their US counterparts spent the Thanksgiving Day holiday scoffing copious amounts of turkey, stuffing and pumpkin pie, washed down with numerous bottles of Californian red, dealers in London found the going tough. The volume of overall business left a lot to be desired and the Footsie drifted 5.75 points lower to 6723.42.
Discount airline easyJet led the sector higher with a gain of 88p to 1633p. Buyers climbed aboard as the oil price fell further to a level not seen since August 2010 and the Scottish Parliament was promised new powers by the UK government, including control over air passenger duty (APD).
Hopes the tax could even be scrapped completely in Scotland raised hopes that passenger traffic would increase. British Airways owner International Consolidated Airlines rose 21p to 457.8p.
Supermarket shares were put through the mincer ahead of Black Friday. Eric Lascelles, chief economist at RBC Global Asset Management, said: ‘There is a convincing case to be made that strong Black Friday sales merely eats away at sales later in the year, resulting in little aggregate benefit to retailers (and possibly even a detriment given the low prices associated with Black Friday)’.
Beleaguered Tesco, which has said it would be offering customers a level of deals which in some cases will ‘outdeal’ Boxing Day, cheapened 1.55p to 185.65p. Rival J Sainsbury lost 5.1p to 233.9p after broker Shore Capital downgraded to sell from hold. Analyst Clive Black says it is set for a period of sustained earnings per share decline, as management transfers value from shareholders to customers to protect its medium to long-term prospects. He sees Sainsbury’s at best as dead money and with the Tesco price/margin reset to come, the risks on revised forecasts remains on the downside.
- Plastic packaging supplier RPC Group jumped 33p to 580p as analysts applauded its €386million acquisition of Promens, a leading European manufacturer of rigid plastic products. The deal, which strengthens its market position in core markets and extends its geographical reach, is to be partly funded by a rights issue to raise £200million. RPC believes the deal will be earnings enhancing in its full year.
Most watched Money videos
- Pair of rare 1980s Ford Sierra RS500 Coswotths head to auction
- Dacia Spring is Britain's cheapest EV at under £15,000
- Aston Martin unveils new Vantage sports car capable of 202mph
- German car giant BMW has released the X2 and it has gone electric!
- MG unveils new MG3 - Britain's cheapest full-hybrid car
- Steve McQueen featured driving famous stunt car in 'The Hunter'
- Would you retire abroad for cheaper living costs?
- Iconic Dodge Charger goes electric as company unveils its Daytona
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- How to invest to beat tax raids and make more of your money
- Mini unveil an electrified version of their popular Countryman
- Competition watchdog clears Aviva's £460m acquisition of...
- EnQuest posts another loss after hit from oil and gas...
- Bidding war erupts for UK telecoms firm Spirent as...
- Superdry founder Julian Dunkerton ends his pursuit of the...
- No one should expect sympathy when the crypto bubble...
- Thames Water shareholders refuse £500m lifeline plea
- My friends say I'm a shopaholic but I'm 34, single and...
- Insurers are STILL stinging drivers by undervaluing...
- MARKET REPORT: North Sea oil producer Enquest posts loss...
- Disgraced crypto tycoon Sam Bankman-Fried sentenced to 25...
- JD Sports boss fires out at Nike for failing to produce...
- Spirent ditches Vivai as Keysight gatecrashes deal with...
- My blood boils when I hear critics say Waspi women should...
- Dividend hero SAINT's manager on the best shares for...
- Isa transfer cashback deals: Give your Isa a £2,000 boost...
- William Hill owner 888 agrees to flog assets as it...
- AO World shares surge as online retailer electronics...
- Legal firm representing St James's Place customers to...