We have a clear strategic focus that enables us to deliver long-term outperformance across the property cycle. With our financial position stronger than ever, this year our priorities turned to crystallising the significant development surpluses we have created, continuing to drive rental growth through capturing reversion and preparing the pipeline for the next cycle.
The core principles of our business model
The core principles of our business model are:
- 100% central London, with a West End focus
- Reposition properties let off low rents
- Flex operational risk through the property cycle
- Maintain low financial leverage
- Disciplined capital management; raise to acquire, distribute excess
Toby Courtauld Chief Executive, Great Portland Estates
Our focused business model is all about repositioning properties to unlock their full potential. When combined with the effective reading of the property cycle, in a market we know inside out, we deliver attractive long-term returns for shareholders.
Our business model is underpinned by
How we create London spaces
With a healthy balance sheet, conservative leverage and plentiful liquidity across our low cost diversified debt book, we are well placed to navigate difficult markets and make the most of opportunities as they arise. We operate a tax efficient REIT structure and support a progressive dividend policy.
With a 100% London focus, with 48% of our portfolio in our development programme and pipeline we are well positioned for future growth. With detailed business plans for each property reviewed quarterly and our focus on improving sustainability metrics that enhance the long term value of the business and reduce obsolescence, we create efficient, resilient healthy and innovative space which meets the changing demands of modern occupiers and is sensitive to the environment in which it is located.
Our commitment to providing space that meets occupiers’ needs, across a wide range of industries, helps us maintain high retention rates and low vacancy rates. We are committed to building strong relationships with both our joint venture partners and key suppliers, including contractors, debt providers and advisers. We also aim to have ongoing positive engagement with local authorities, planning departments and our local communities.
A first class team
Our experienced management team and in-house specialists are incentivised to deliver strong returns and outperform our KPI benchmarks. Our culture is entrepreneurial and collegiate with a disciplined approach to risk management and governance.
Flexing our activities through the cycle
Our proactive management of the portfolio is shaped in tune with the property cycle. By reading this cycle, and adapting our activities accordingly, we aim to deliver long-term sustainable shareholder value.
At different points in the cycle we aim to:
We look to buy unloved assets in strong locations with angles to exploit. They are usually priced below replacement cost, typically acquired off-market and let off low rents.
Through lease restructuring, refurbishment or redevelopment, we deliver the kind of spaces today’s occupiers want, while enhancing the local environment. We manage potential risk through pre-letting, joint ventures and forward sales.
We typically rotate 10-20% of the portfolio every year by selling properties where we’ve executed our business plans or to monetise expected future profits. The proceeds are then reinvested into higher return opportunities.
Nick Sanderson Finance Director
With our strong balance sheet and talented team, we are well placed to continue delivering superior long-term returns.