The Directors of Great Portland Estates announce results

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The Directors of Great Portland Estates plc announce the results for the Group for the six months ended 30 September 2012.


  • Portfolio valuation up 4.0%1 since 31 March 2012 (developments: 6.7%1)
  • 12 month Total Property Return of 12.8% outperforming IPD’s central London benchmark of 9.6% driven by capital return of 9.6% vs 5.1% for IPD central London (West End offices capital return of 13.2% vs 6.6% for IPD)
  • Rental value growth of 2.0%1 (2.4% West End offices, 2.7% West End retail), with an acceleration in the second quarter (1.1% vs 0.9% in the first quarter)
  • EPRA2 NAV per share up 5.2% to 424 pence
  • Net assets of £1,304.8 million up 5.4% from 31 March 2012
  • EPRA2 profit before tax of £8.9 million, down 14.4% on 2011, up 27.1% over the preceding six months. EPRA2 earnings per share of 2.9 pence
  • After revaluation surplus, reported profit before tax of £76.7 million (2011: £79.1 million)
  • Interim dividend per share of 3.3 pence, an increase of 3.1%
  • New property acquisitions totalling £159.0 million completed since March 2012, 100% West End
  • Disposals of £136.8 million (our share) during the half year at a 5.4% surplus to book value
  • Sale of 37.5% interest in 100 Bishopsgate Partnership at June 2012 book value, with retained 12.5% interest subject to ‘put’ and ‘call’ arrangements
  • Five development schemes (651,600 sq ft) on site, expected profit on cost of 42.5%, 47.0% pre-let, encouraging occupier interest in much of the balance. Completions through to spring 2014, timed to coincide with market supply shortages
  • Significant further development potential with 16 uncommitted schemes, covering 1.6 million sq ft, all with flexible start dates. 2.3 million sq ft total development programme covering 53% of existing portfolio
  • 45 new leases signed securing annual income of £5.9 million (our share: £4.5 million) covering 102,700 sq ft, with market lettings at 6.8% ahead of the valuers’ rental values
  • £5.0 million of lettings under offer (our share: £3.3 million) at 1.3% above March 2012 rental values
  • EPRA2 vacancy level reduced to 2.4% from 3.3% at March 2012. Average office rent of only £36.12 sq ft and reversionary potential of 11.3%
  • Gearing remains conservative at 52.6%, significant cash and undrawn committed facilities of £264 million and weighted average interest rate low at 3.6%
  • Pro forma3 loan to property value of 35.1% and weighted average drawn debt maturity of 7.5 years. 62% of drawn debt from non-bank sources
  • Placing of up to 31.25 million new ordinary shares announced to take advantage of increased acquisition opportunities in central London - see separate announcement

1 On a like for like basis and including share of joint ventures

2 In accordance with EPRA guidance

3 Pro forma for sales completed since period end

"We are pleased to report a strong start to this financial year, and another period of outperformance of the London commercial property market; we have delivered material surpluses from our development programme, further attractive acquisitions in the West End, profitable disposals and numerous lettings ahead of market rates..."
Toby Courtauld
Toby Courtauld
Chief Executive


Conditions in our central London market remain supportive. Although the rate of leasing was below the long run average around the time of the Olympics, we are witnessing a solid pick-up in demand from prospective occupiers, particularly in the West End. In the investment market, London continues to attract the lion’s share of international capital flowing into Europe and the demand for assets today outweighs the supply by more than four times, with much of this demand focused on long-let and ‘trophy’ properties. Since the summer, we have identified an increasing number of interesting acquisition opportunities, predominantly liquid lot-size, complex properties let off low rents in the West End and which are difficult to debt finance. We expect to identify further such opportunities in the coming months.

Within this context, we maintain our confident outlook; our portfolio, 100% in central London, is rich with asset management and development opportunity and is well positioned for further growth; our conservative gearing and low cost firepower, expected to be supplemented by the placing announced this morning, will enable us to deliver on our existing growth plans and exploit new opportunities as we find them."