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Shaftesbury launches £265m fundraising to expand portfolio

Rhiannon Bury
London's Carnaby Street - AFP

West End property company Shaftesbury, which owns Carnaby Street, has embarked on a £265m fundraising to add new London buildings to its portfolio.

The company will use some of the money to finance the purchase of two new Soho properties to add to its roster, while the rest will be kept for future purchases and for the upkeep of the estate.

The placing was priced at 952p, a 5pc discount to Tuesday’s closing price. Shares in the firm fell 1.83pc on Wednesday as a result of the discount.

Brian Bickell, chief executive of Shaftesbury, said: “Securing additional equity will support the continuing expansion of, and investment in, our exceptional portfolio located in the heart of London’s West End.”

The firm announced on Wednesday that it had agreed a deal with Legal & General to buy an office and residential scheme in Soho for £92m.

David Brockton, analyst at Liberum, said: “The acquisition provides Shaftesbury with control over this location, which has been deemed strategically important, and could provide opportunity for change of use, reconfiguration and refurbishment to create new retail and restaurant space, subject to planning.”

This is likely to cost the company around £20m, it said.

Shaftesbury has largely avoided any gloom in the retail sector thanks to its unique portfolio of shops and has continued to attract retailers. It owns 14 acres of London property, spread across Soho, Chinatown, Carnaby Street and Charlotte Street.

It posted a more than three-fold rise in earnings last year, and the value of its property per share grew 7.2pc to 952p, ahead of analyst expectations. This measure was used as the basis for the price of its equity raising.

It has also benefited from a weakened value of the pound, attracting more overseas visitors to the area.