GPE’s Office Portfolio Valuation

GPE’s Office Portfolio Valuation Up 2.8%

UNITED KINGDOM – Great Portland Estates (GPE), a major commercial property landlord in London, recorded a profit after tax of £62.2 million (US$83.5 million) during the first half of FY2021, reversing the £154.8 million loss last year, reported on Friday evening (19 November, SGT).

Moreover, the valuation of the company’s real estate portfolio edged up by 2 percent year-on-year to £2.5 billion. Specifically, the value of its office assets rose by 2.8 percent, but that for its retail properties dipped by 0.8 percent.

Great Portland Estates’ rental values also increased marginally by 1.6 percent, while yield slightly declined by 1 basis point. It recorded overall property returns of 3.7 percent and capital return of 2.2 percent as compared MSCI Central London (quarterly index) growth of 1.3 percent.

“Whilst activity is not yet back to pre-COVID levels, it is clear that London’s economy and its property markets are recovering with office workers and shoppers both returning to the main commercial districts of the capital,” said Great Portland Estates’ Chief Executive Toby Courtauld.

“Simultaneously, we are seeing healthy growth in office jobs, which is driving renewed occupier demand for City and West End offices, up by more than 50 percent since this time last year.

Amidst the positive figures, the FTSE 250 property investment and development company, upgraded the rental value guidance of its portfolio to between 2 percent and 5 percent for the whole of FY2021.

“Encouragingly, we are successfully capturing this market momentum in our own spaces, leasing more in the first half than in the previous 2 years put together and beating rental values by 9.8 percent overall.”

“Whilst market volatility is possible in the near term, we expect these positive leasing trends to continue. As a result, and assuming no further COVID restrictions, we have raised our guidance for our rental values and now forecast that they will rise for the full year in the range of 2 percent to 5 percent,” added Courtauld.

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