Booming London Economy drives growth for Great Portland Estates

Posted on 21 May, 2015 by Kirsten Kennedy

Great Portland Estates’ annual results, which were released yesterday, show strong capital growth from its Central London portfolio.

ID:90111875

The results were driven by a combination of rental growth and development surpluses, which have seen the value of the group’s portfolio grow by 18 per cent in the year as a whole, with 3.1 per cent of this growth occurring in the fourth quarter of the financial year.

Rental value growth stands at 10.3 per cent overall which, when broken down, translates to growth of 10 per cent in its office sector and 11.4 per cent in retail. Again, 3.1 per cent growth was recorded in the final quarter of the year, helping the group to outperform the IPD Central London average growth of 9.5 per cent.

Thanks to the strength of the group’s portfolio, and the various properties owned in areas of increasingly high demand, the group’s track record of successful leasing activity remained intact with leasing for the year 6 per cent ahead of estimated rental value (ERV).

The group netted 76 new lettings over 367,600 sq ft, securing an annual income of £21.5 million – this included £3.7 million worth of pre-lets and £9.6 million in development lettings.

Chief executive Toby Courtauld expressed his delight at the incredibly positive results.

He says; “We are delighted to be able to report another year of strong results, driven by our development successes and rental growth, and maintaining our track record of long-term outperformance against all of our industry benchmarks.

“London’s economy has continued to outpace that of the rest of the UK and we can expect this to continue, assuming the inevitable uncertainty surrounding the outcome of the proposed EU referendum does not damage London’s appeal as a business capital; both the risk appetite and employment intentions of the Capital’s businesses remain expansionary and we anticipate their space needs to follow suit.

“As a result, with falling vacancy rates and the supply of new space to let in the near-term remaining extremely tight, we can look forward to further increases in rents.”

In order to ensure the momentum of last year continues to build, the group will continue to focus upon creating new space primarily in the West End. The group’s total development pipeline stands at 2.5 million sq ft, 69 per cent of which is in the West End and 45 per cent of which has already secured planning permission.

Mr Courtauld concludes; “Our 1.2 million sq ft committed and near-term development programme is the largest we have ever undertaken and accounts for circa 25% of all core West End speculative deliveries over the next four years.

“With a deep and talented team, plentiful low cost finance and supportive market conditions, we are confident that we will continue generating attractive returns for shareholders.”




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

Interest Rates Impact on Commercial Property

Commercial Property Investment Outlook for 2023

The best places to stay on the Riviera

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants