Shaftesbury Capital lifts dividend 16% as West End rents drive H1 growth

Strong leasing sits at the heart of these results

Shaftesbury Capital PLC has reported growth across earnings, dividends, rents and property values for the six months ended 30 June 2026.

The West End property group completed 226 leasing transactions worth £23.2 million of contracted rent. These were agreed 4.9% above December 2025 estimated rental value, or ERV, and 18.4% above the rent previously paid for the same space.

ERV is an estimate of the annual rent a property could command in current market conditions. Leasing ahead of ERV suggests demand is stronger than the assumptions already reflected in the portfolio.

That activity helped increase portfolio ERV by 3.8% on a like-for-like basis to £281.1 million. The independently assessed value of the property portfolio under management rose 3.4% like-for-like to £5.62 billion.

The original company announcement contains the complete interim results.

Shaftesbury Capital's key H1 figures

Metric	H1 2026	Comparison
Profit attributable to shareholders	£193.8 million	£151.6 million in H1 2025
Underlying earnings	£44.0 million	£40.6 million in H1 2025
Underlying earnings per share	2.4p	2.2p in H1 2025
Interim dividend per share	2.2p	1.9p in H1 2025
EPRA NTA per share	223.1p	214.7p at December 2025
Portfolio value under management	£5.62 billion	£5.41 billion at December 2025
Like-for-like ERV growth	3.8%	6.2% for full-year 2025
EPRA loan-to-value	16.1%	16.8% at December 2025

Underlying earnings rose 8% to 2.4p per share, while the interim dividend increased 15.8%, rounded to 16%, to 2.2p per share.

The dividend will be paid as a property income distribution on 23 September 2026 to shareholders on the register on 28 August 2026.

Property values rose without help from falling yields

The 3.4% portfolio valuation increase is particularly notable because the equivalent yield remained unchanged at 4.4%.

Property values can rise when rental expectations improve or when valuation yields fall. Here, Shaftesbury Capital says the gain was driven by leasing and asset management, with ERV growing 3.8%.

Retail was the strongest part of the portfolio. Retail ERVs increased 4.6%, while retail property valuations rose 5.4%. Food and beverage valuations increased 4.0%, but residential values slipped 0.2% amid muted investor sentiment and lower transaction activity.

Performance was also positive across the group's main locations. Chinatown recorded the strongest valuation growth at 4.1%, followed by Covent Garden at 3.7% and Carnaby and Soho at 2.6%.

Total property return was 5.0%, compared with 2.6% for the MSCI Total Return Index cited by the company.

There is more rent to capture

Annualised gross income increased 2.0% like-for-like to £219.5 million. However, portfolio ERV stood at £281.1 million, leaving total reversion of £61.6 million.

Reversion is the potential gap between current income and the rent that could eventually be collected following lease events, refurbishment and the expiry of rent-free periods. It is not guaranteed income, but it shows the scale of the opportunity within the existing estate.

Management says market rent is 28% above current passing rent. Around 20% of portfolio ERV reprices annually, giving the company regular opportunities to capture higher rents.

Occupancy remains high. Space available to let represented 2.6% of portfolio ERV, although total EPRA vacancy, including units under offer, increased to 4.7% from 4.2% at December 2025.

A further 4.9% of ERV was under refurbishment. These projects cover 158,000 square feet and are expected to be delivered over the next 12 to 18 months.

The balance sheet provides room to invest

EPRA loan-to-value, which compares debt with property assets, fell to 16.1% from 16.8%. Net debt declined to £787.4 million from £813.3 million, while net debt to EBITDA improved to 6.4 times from 6.6 times.

The group had £110.2 million of cash and £879.7 million of undrawn committed facilities on a proportionate ownership basis. Available resources after capital commitments were £979.3 million.

During the period, Shaftesbury Capital repaid £275 million of exchangeable bonds using cash. It also sold its interest in Lillie Square for £64.7 million before costs, broadly in line with its December 2025 valuation of £65.2 million. Accounting adjustments and transaction costs resulted in a £3.0 million loss on disposal.

The Covent Garden partnership also arranged a new £300 million unsecured revolving credit facility with a five-year maturity and two one-year extension options.

This liquidity gives management flexibility to fund refurbishment, acquisitions or other expansion opportunities. The trade-off is that the weighted average cash cost of drawn debt increased to 4.1% from 3.6% at the end of 2025.

What investors should watch

The clearest positive is that leasing demand remains strong despite broader economic and geopolitical uncertainty. New leases and renewals were comfortably ahead of previous rents, supporting higher ERV, property values and dividends.

The balance sheet also looks conservatively positioned relative to the company's stated maximum LTV limit of 40%. That reduces near-term refinancing pressure and gives the group options if attractive assets become available.

There are still some points to monitor:

• EPRA vacancy increased to 4.7%, even though 2.1% was already under offer.
• The expected credit loss provision rose from £1.3 million to £2.8 million following collection delays and several customer administrations or anticipated failures.
• Residential property values declined slightly.
• The weighted average cost of debt increased.
• Total shareholder return was negative 3.3%, despite a 4.9% total accounting return.

The last point highlights a disconnect between operational progress and the listed share performance. EPRA net tangible assets reached 223.1p per share, while the RNS records a period-end share price of 138.1p. This does not guarantee the gap will close, but it remains an important feature of the investment case.

Rental delivery remains the next test

Shaftesbury Capital has not disclosed a formal upgrade or numerical full-year earnings forecast. Management nevertheless remains confident of achieving its medium-term targets and says the leasing pipeline is strong.

For the second half, the key question is whether the company can continue turning its £61.6 million reversionary opportunity into contracted rent and cash earnings without allowing vacancy, credit losses or financing costs to dilute the benefit.

The first-half evidence is encouraging. Leasing has beaten previous rents, property values have risen without yield compression, the dividend is growing and leverage remains low. Investors will now want to see that momentum carried into income and earnings through the rest of 2026.