First quarter valuation and business update

28 July 2014

 

Great Portland generating organic growth with portfolio value up 3.8% in Q1

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 2014. Details of the Group’s recent valuation and rental value trends are set out in the Appendices.

Continued growth in rental values and capital values driving NAV per share uplift

  • Portfolio valuation1 up 3.8%, 9.0% and 18.3% over 3, 6 and 12 months respectively
  • Continued strong valuation performance from our development properties up 6.2%, 13.8% and 24.9% over 3, 6 and 12 months respectively
  • Rental value growth1 of 1.9% (1.5% West End offices, 1.3% West End retail) 
    over 3 months
  • Rent roll growth of 6.7% over 3 months
  • EPRA NAV2 per share of 593 pence at 30 June 2014 up 4.2%, 12.5% and 27.8% over 3, 6 and 12 months respectively

Strong leasing activity ahead of ERVs

  • 22 new lettings (117,000 sq ft) signed generating annual rent of £6.1 million (our share: £4.5 million); market lettings 1.4% ahead of March 2014 rental values (£17.3 million over 12 months, 4.1% ahead of June 2013 rental values)
  • £1.0 million of new lettings since the quarter end and a further £4.2 million currently under offer, 6.1% premium to March 2014 ERV
  • Vacancy rate lower at 2.5% (31 March 2014: 3.7%), low average office rent passing of £43.70 per sq ft, reversionary potential of 19.4% 

Committed development programme expanded and extensive pipeline of opportunity

  • Five committed schemes (724,500 sq ft), expected profit on cost of 20.7%, including:
    – 411,200 sq ft mixed use scheme at Rathbone Square, W1
    – 91,900 sq ft new build development at St Lawrence House, 26/34 Broadwick Street, W1
  • Good progress across further six near-term schemes (305,600 sq ft), including 73/89 Oxford Street, W1 and 148 Old Street, EC1. All with potential starts in next 12 months
  • Major development opportunity from additional 14 uncommitted pipeline schemes (1.3 million sq ft)
  • Total development programme of 2.3 million sq ft covering 54% of the existing portfolio, 75% in West End, 53% with planning permission

Attractive bolt-on acquisition and disciplined capital recycling

  • Medium-term development opportunity, Elm House, 13/16 Elm Street, WC1 purchased in July for £26.0 million (our share: £13.0 million), on a 0.5 acre site adjoining 200 Gray’s Inn Road
  • Successful launch of sales programme for 142 private residential units at Rathbone Square, W1
  • Sale of Tudor House, 35 Gresse Street, W1 for £8.4 million

Excellent financial position

  • Gearing conservative at 29.9%, loan-to-property-value of 25.1%
  • Financial firepower of £492.8 million, weighted average interest rate only 3.7%

 

We are pleased to report a strong start to this financial year, with our attention focused on capturing the material organic growth potential from our 100% central London portfolio: we have made good progress across our 2.3 million sq ft development programme, winning new planning permissions and starting our largest ever development at our 411,200 sq ft Rathbone Square scheme at the east end of Oxford Street; we continue to lease well, attracting numerous businesses to our well designed, centrally located properties at rates ahead of ERVs; and our disciplined capital recycling has crystallised strong surpluses.

Toby Courtauld Chief Executive

"...

With a growing London economy and healthy demand for our limited quantity of available space, we can expect further rental and valuation growth which bodes well for our significant development programme."

Investor/analyst conference call

GPE will host a conference call at 10.30am today, 28 July 2014. The details for the conference call are as follows:

Telephone number: +44 (0) 20 3003 2666
Password: Great Portland Estates

Contacts

  • Nick Sanderson

    Finance and Operations Director

    Contact details

    Download vCard
  • Finsbury

    James Murgatroyd

    Gordon Simpson

    Contact details

    T: 020 7251 3801

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