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Shaftesbury CEO says smaller tenants more resilient than big players

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By Aby Jose Koilparambil

(Reuters) -The boss of British commercial property firm Shaftesbury said on Tuesday that independent, small tenants had been more resilient than multinationals and big chains in the retail and hospitality sectors during the COVID-19 pandemic.

The trust that invests in London reported a half-year loss after tax of 338.5 million pounds ($480 million), the first time since 2009 it has posted two consecutive losses for the six months ending in March, which includes the peak festive season for non-essential retailers.

Commercial property firms heavily exposed to non-essential retailers and hospitality firms are among the worst hit in Britain’s real estate sector, with steep valuation deficits, reduced footfall and dwindling rental income.

“The big chains of retail and restaurants have been the ones that have been shedding space, because quite frankly in the good times they took too much of it,” Chief Executive Officer Brian Bickell told Reuters.

He said independent businesses, which made up most of Shaftesbury’s tenant base, were more determined to come back and were more resilient than multinationals and big chains, which “just shed spaces whenever they want”.

The trust, which owns 600 buildings in the city’s West End, said its EPRA net tangible assets – a measure of the value of its buildings per share – plunged 21.5% to 5.83 pounds while the valuation of its wholly-owned portfolio fell 10.1% to 2.8 billion pounds.

Last week, pubs and restaurants reopened their indoor areas and cinemas and hotels resumed operations after non-essential retail premises opened their doors in mid-April – all as a part of the government’s phased exit from pandemic restrictions.

“Since the start of the reopening on April 12, we are seeing an encouraging increase in demand for space and lettings and a return of footfall and spending across our locations,” Bickell said in a statement.

($1 = 0.7054 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips and David Clarke)

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