UPDATE 2-Shaftesbury sees higher 2010 rents; H2 values rose

* Sees strong demand boosting rents next yr

* Property valuations recovered 7.1 pct in H2

* End Sep NAV at 335 pence per share

* Shares rise 7.6 percent (Recasts lead, adds conference call, share price)

By Daryl Loo

LONDON, Dec 1 (Reuters) - London landlord Shaftesbury (SHB.L) expects strong demand for West End retail, restaurants, and apartments to boost rents next year, after the value of its properties showed a marked recovery in its second half.

Shaftesbury, which owns more than 450 properties concentrated in the West End, said on Tuesday demand for space in the shopping and leisure district has been resilient throughout the year despite the downturn in the UK economy.

"The levels at which we let our restaurants, shops and apartments have been absolutely consistent for the last three or four years, and if anything I think it might improve in the next year the way demand is looking," its chief executive Jonathan Lane said in a conference call.

By 1055 GMT, Shaftesbury shares were up 7.6 percent, outperforming the 1.6 percent rise in the FTSE 100 .FTSE.

Major UK landlords Land Securities (LAND.L) and British Land (BLND.L) last month called an end to the commercial property market's two-year slump, while data shows October values jumped the most in nearly four years. [ID:nLG354795] [ID:nLD40614]

"Having seen the strong outperformance of central London retail, the valuation strength is to be expected," JPMorgan property analyst Harm Meijer said in a note.

"Given the weakness in UK stocks over previous days, we think opportunities have opened up particularly for quality names like Shaftesbury," he said.

FURTHER ACQUISITIONS

Shaftesbury, which raised 150 million pounds through a rights issue in May to buy discounted property, said it is confident of acquiring more assets to complement its portfolio.

It had made 29.8 million pounds worth of acquisitions in the year to September 2009, and has a further 213.8 million pounds of unused bank facilities at the year end, the company said.

Shaftesbury reported earlier on Tuesday its property portfolio was valued at 1.21 billion pounds at end-September, down 3.8 percent over the year after value falls earlier in the year, partially offset by a 7.1 percent recovery in the second half.

Its adjusted net asset value fell 11 percent to 335 pence per share at end-Sept, from an adjusted 376 pence a year ago.

Shaftesbury declared a final dividend of 4.75 pence per share, compared with last year's 6 pence, with the reduction in amount per share reflecting increased number of shares in issue following the rights issue.

Including the interim dividend of 7.5 pence, its total distribution for the full-year is 21.0 million pounds or 12.25 pence per share, an increase in the total distribution of 41 percent, it said. The company said its adjusted profit before tax increased 39 percent to 21.3 million pounds, while the estimated rental value of its portfolio is at 78.3 million pounds, down 1.9 million pounds over the year due mainly falling office rents. ($1=.6070 pounds) (Reporting by Daryl Loo; Editing by Hans Peters) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters) ((daryl.loo@thomsonreuters.com; +44 (0)207 542 5228; Reuters Messaging: daryl.loo.reuters.com@reuters.net))