Half Year Results 2014

13 November 2014

 

The Directors of Great Portland Estates plc announce the results for the Group for the six months ended 30 September 2014. Highlights1 for the six months:

Continued strong growth in both capital and rental values

  • Portfolio valuation up 8.9%2 since 31 March 2014 (developments: 13.0%2) and 5.0%2 in Q2
  • 12 month capital return of 21.9% outperforming IPD Central London Index of 20.7%, with total property return of 25.0% v 25.1% for IPD Central London; five year capital return of 109.3%, 21.5% ahead of IPD Central London
  • Rental value growth of 3.6%2 (3.6% offices, 3.4% retail)
  • Rent roll growth of 7.8% over six months

Excellent financial results

  • EPRA3 NAV per share of 636 pence, up 11.8% in period and 7.3% in Q2
  • Net assets of £2,160.8 million (31 March 2014: £1,931.9 million)
  • EPRA3 profit before tax of £21.0 million, up 16.0% on 2013. EPRA3EPS of 5.9 pence, up 11.3%
  • After revaluation surplus, reported profit before tax of £246.5 million (2013: £146.9 million)
  • Interim dividend per share of 3.5 pence, up 2.9%

Development programme delivering significant surpluses with more to come

  • Two schemes completed (297,000 sq ft) including Walmar House, W1 in October, profit on cost of 55%
  • Three committed schemes (521,500 sq ft) including Rathbone Square, W1, capex to come of £262.8 million, expected profit on cost of 16.4%, all in the West End
  • Good progress across further eight near-term schemes (613,400 sq ft), 75% in West End
  • Total development programme of 2.2 million sq ft, covering 54% of existing portfolio, 71% in West End, 46% with planning permission 

Strong leasing activity ahead of ERV

  • 41 new lettings (189,200 sq ft) securing annual income of £9.7 million (our share: £6.6 million), including development lettings of £4.8 million (our share: £2.4 million)
  • Market lettings were 3.1% ahead of valuers’ March 2014 ERV
  • Vacancy rate lower at 2.3%, average office rent only £44.15 sq ft, reversionary potential of 21.0%
  • Since 30 September 2014, new lettings of £1.2 million (our share: £0.9 million) and a further £6.0 million (our share: £5.4 million) currently under offer, 5.6% ahead of March 2014 ERV

Disciplined and profitable capital recycling with selective bolt-on acquisitions

  • To date, 129 private residential units pre-sold at Rathbone Square, W1 for £220.2 million (78.1% of the total by value); one further unit under offer
  • Since 30 September 2014, two further disposals:
      • Sale pre-completion of 142,500 sq ft pre-let development at 12/14 New Fetter Lane, EC4 for £165.8 million (including £92.8 million for the site), 4.5% yield, unlevered IRR of 55.1%
      • Sale of remaining 12.5% interest in the 100 Bishopsgate Partnership for £15.8 million
  • Two acquisitions totalling £33.6 million (our share: £20.6 million), both adjoining existing GPE properties

Financial position as strong as ever

  • Gearing of 30.0%, pro forma4 loan to property value of 22.0%, weighted average interest rate only 3.6%
  • New £450 million revolving credit facility, pro forma4 cash and undrawn facilities of £508 million

 

We are pleased to report a strong performance across the Group during the first half as we focus on capturing the significant organic growth potential across our 100% central London portfolio...

Toby Courtauld Chief Executive

"...

London continues to consolidate its position as one of the world’s most successful city economies: jobs are being created at the fastest rate in a generation across a range of industries; the Capital’s businesses are investing for growth; and its appeal as an investment destination of choice continues unabated.

Within this positive context, we look forward to a productive second half: we can expect strong leasing interest in both our committed development properties and our limited quantity of vacant space, in both cases at rates ahead of ERV’s; we will crystallise further surpluses through our disciplined approach to capital recycling; and our plentiful, low-cost financing will enable us to deliver on our significant growth plans."

1 All values include share of joint ventures unless otherwise stated
2 On a like-for-like basis
3 In accordance with EPRA guidance
See Our financial results

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