Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Shaftesbury- Shaftesbury(SHCS.L) (SHCS.L)

Strong rental growth, strong balance sheet

PRICE TARGET 170p EQUAL-WEIGHT THESIS

We start from an average or ‘base discount’ of 5%, which is the level on which REITs trade Shaftesbury offers the strongest rental

across the cycle. We widen this by 20pp to 25%, a level that is consistent with the 8-10% growth in the sector, which supports the

total NAV based return guidance. Hence we apply the resulting 25% discount to our portfolio's relatively low net yield. The

estimated Dec 2026 NAV. group's balance sheet (17% LTV, 6.6x net

debt/EBITDA) offers flexibility to take

167p advantage of the next cycle's opportunities.

Consensus Price Target Distribution 130.00p 200.00p We argue the stock could see a renewed

MS PT period of outperformance as and when

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates Shaftesbury starts to deploy its balance

sheet.

RISK REWARD CHART

Consensus Rating Distribution

GBp 55% Overweight

260p260p(+78.08%)260p(+78.08%)(+78.08%) 27% Equal-weight

18% Underweight

240 MS Rating

Source: Refinitiv, Morgan Stanley Research

170p170p(+16.44%)170p(+16.44%)(+16.44%)

146p146p146p Risk Reward Themes

120 Self-help: Positive

View descriptions of Risk Rewards Themes here

95p95p(-34.93%)95p(-34.93%)(-34.93%)

JUL '25 JAN '26 JUL '26 JUL '27

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE 260p BASE CASE 170p BEAR CASE 95p

Rebound Delivering on strong rental growth Weaker consumer on higher inflation

Rental growth accelerates and is perceived Rental growth remains strong. Capital values in the group's portfolio fall by

as sustainable. The group's portfolio values 10% relative to our base case. Rents fall