Shaftesbury Capital (LON: SHC) has been formed following the completion of the merger of Shaftesbury and Capital and Counties Properties (LON: CAPC), although the name change does not become effective until 7 March. The fully listed central London-focused mixed-use REIT has a portfolio valued at £4.9bn.
Pro forma net tangible assets are £3.5bn or 192p a share, while net debt was £1.5bn at the end of 2022. Loan to value is 31%. Annualised gross income is £178m and the estimated rental value of the portfolio is £227m. There should be £12m of annualised cost savings from the merger.
According to Peel Hunt, Shaftesbury Capital could provide an average 10% accounting return over the next three years. A 2.9p a share dividend is forecast for 2023. The net tangible asset value could reach 199p by the end of 2023 with loan to value edging lower.
The current share price is 5.2p higher at 129.7p. That is a discount to net tangible assets of nearly one-third. If management can show that it is making progress with improving the profit performance and increases asset value. Peel Hunt forecasts earnings of 3.8p a share for 2024 and has set a share price target of 185p.