GPE announce strong end of year results

REIT to focus on office development programme as occupier demand picks up

Article posted: 24 May 2011

Great Portland Estates has today announced excellent preliminary end of year results for the year to 31 March 2011, with much of the year’s success down to the rental growth of office space in Central London.

The REIT enjoyed a 15.5% increase in its portfolio valuation to £1.65bn, with a total property return of 22.4% outperforming IPD’s Central London index of 18.0%. With an average rental value growth of 10.8%, GPE saw a 15.9% increase in rents for office space in the West End. GPE’s net asset value jumped 27.2% to 360p per share but the most significant increase was the 78.1% rise in revenue pretax profit to £50.4m.

With six schemes, totalling 405,800 sq ft, on site and progressing well towards completion, GPE has a further 2.6m sq ft of projects in the pipeline, including the Hanover Square development which has just received planning permission and which will deliver 205,000 sq ft of retail, residential and office space in Mayfair.

Another scheme which is underway is the 100 Bishopsgate scheme (pictured) set to provide around 800,000 sq ft of Grade A office space in the City of London.

Commenting on the results, Toby Courtauld, Chief Executive, said: “London’s investment markets continue to benefit from an excess of demand for assets over supply and, with prices having increased by more than 25% from their lows, it will be more challenging to generate the sorts of returns we have achieved from acquisitions made over the past 18 months. As a result, our focus is shifting to the delivery of our major development programme.

“In our occupational markets, conditions continue to improve for landlords. Demand from occupiers has picked up and is running at long-term average rates. This, combined with the lack of new supply and low vacancy rates will produce further rental value increases over the next two to three years."

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Posted by Sara