West End woes as property group reports losses of £221m

West End woes as property group reports losses of £221m



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Shaftesbury, the West End property group, have revealed pre-tax losses of £221 million, due to plummeting commercial property values. 

Owning apartments, restaurants, shops and offices in Carnaby Street, Covent Garden and London’s Chinatown, the group have said that in spite of the losses, their property locations are well placed to survive the worst of the financial storm.
 
The value of the firm’s portfolio has now fallen over 15%, but Shaftesbury are remaining positive, saying they will emerge from the economic crisis even stronger.
 
Chairman John Manser commented, “These are times of almost unprecedented economic turmoil and Shaftesbury cannot expect to be untouched by the prevailing market conditions. Nevertheless, we do believe that the group's highly specialised portfolio of tightly defined central London villages is better placed than most to continue generating robust income during this difficult period.”
 
There is still reason for the company’s optimism, with profits excluding valuations showing a rise of over 20% to £15.3 million, as a result of the demand for rental is still thriving.
 
Some financial figures are growing worried that real drops in property values are going unreported by property companies, due to the problems in pricing buildings in the current economic climate.
 
Currently, 82% of commercial property valuations come with risk warnings attached because of how rapidly values plunged after US investment bank Lehman Brothers folded. Declining numbers in transactions have also caused a lack of comparables, according to a study by NB Real Estate.
 
“Although it is impossible to say how long this economic downturn will prevail, we remain confident that, when the gloom lifts, Shaftesbury will emerge strongly positioned to benefit from its concentration of assets in the centre of one of the world's favourite destinations.” John Manser concluded.

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