First quarter valuation and business update

24 July 2012

 

In today’s Interim Management Statement, the Directors of Great Portland Estates plc (“GPE” or “Group”) announce an update on trading, as well as the quarterly valuation of the Group’s properties as at 30 June 2012.

In today’s Interim Management Statement, the Directors of Great Portland Estates plc
(“GPE” or “Group”) announce an update on trading, as well as the quarterly valuation of
the Group’s properties as at 30 June 2012. Details of the Group’s recent valuation and
rental value trends are set out in the Appendices.

Key points from the quarter1:

  • Portfolio valuation2 up 3.1%, 5.2% and 8.2% over 3, 6 and 12 months respectively
  • Rental value growth2 of 0.9% (1.3% West End offices, 0.4% West End retail)
  • EPRA NAV3 per share of 417 pence at 30 June 2012 up 3.5%, 8.0% and 11.2% over 3, 6 and 12 months respectively
  • EPRA NNNAV3 per share of 413 pence at 30 June 2012 up 4.6%, 8.1% and 9.8%
    over 3, 6 and 12 months respectively
  • Purchases totalling £159.0 million since 31 March 2012, all in the West End, including the acquisition of The Jermyn Street Estate, SW1 announced on 23 July 2012
  • Disposals of £140.5 million (our share: £80.5 million) since 31 March 2012
  • A further £261 million (our share: £190 million) of properties in the market to sell, of which more than £187 million are currently under offer
  • Five committed development schemes (651,100 sq ft) on site, expected profit on cost of 41%. Completions from autumn 2012 to spring 2014
  • Major development potential increased to 17 uncommitted schemes, covering 2.7
    million sq ft, all with flexible start dates. 3.4 million sq ft total development programme covering 55% of existing portfolio
  • 15 new leases signed generating £1.4 million p.a. (our share: £1.3 million p.a.); market lettings at 5.6% ahead of March 2012 rental values
  • EPRA vacancy level reduced to 2.7% (31 March 2012: 3.3%)
  • Gearing remains conservative at 45.5%, loan to property value of 35.1%, weighted
    average interest rate low at 4.1%, significant cash and undrawn facilities of £370
    million
  • New £80.0 million (our share: £40.0 million) ten year, fixed rate non-recourse debt
    facility (in the Great Victoria Partnership) completed on 17 July 2012


1 All values include share of joint ventures unless otherwise stated
2 On a like for like basis including joint ventures, see Appendix 1
3 In accordance with EPRA guidance

Against a backdrop of global economic turbulence and increased central bank monetary stimulus, a significant quantity of capital from around the world continues to flow into the central London property market, resulting in yields reducing in the quarter for prime West End assets. With resilient occupier demand, minimal vacancy of Grade A space and constrained development supply, we expect further rental growth, particularly at our well located, high quality buildings. Following our recent off-market, accretive purchases, we will continue to capitalise on strong investor demand to crystallise surpluses on some of our mature assets, recycling the capital into our significant development pipeline. With numerous opportunities to exploit across our well-located portfolio and our strong financial position, we expect to deliver further attractive returns to our shareholders.

Toby Courtauld Chief Executive

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