Great Portland Estates COVID-19 Trading Update
03 April 2020
Great Portland Estates plc (“GPE”) today publishes a trading update and summary on the impact of COVID-19 on the business to date.
COVID-19 update – working with our stakeholders
- We are supporting our occupiers, particularly in the retail, hospitality and leisure sectors, through agreeing on a case by case basis the payment of monthly rents or deferring rental payments
- We are operating our properties in line with UK Government guidelines. All of our occupied buildings remain operational, albeit the majority of our occupiers are working from home, and activity on two of our three development sites has temporarily been suspended
- We are maintaining our regular payments to suppliers to ensure their cash flow is maintained given the challenging economic backdrop
- We extended our partnership with Centrepoint, our charity partner focused on youth homelessness, to 2022 and increased our annual donation to £75,000
Trading update – rent collection and leasing performance
- We collected 62.9% of quarterly rent due within seven working days of the March quarter day (Dec 2019: 99.3%, March 2019: 99.2%) with a further 4.5% expected imminently; more than 60% of the outstanding rent is from occupiers in the retail, hospitality and leisure sectors
- We secured four new lettings (10,900 sq ft) in the quarter to 31 March 2020, generating annual rent of £0.7 million (our share: £0.7 million) and with market lettings 19.1% ahead of March 2019 ERV
- 13 further lettings are currently under offer totalling £9.0 million p.a. of rent (our share: £9.0 million), including three office pre-lettings. A further two new pre-let offers have been received in the past seven days
Strong financial position – LTV1 of 14.1% and total liquidity of £411 million
- We remain in a robust financial position, with LTV1 of 14.1%, net gearing2 of 14.7% and interest cover not measureable3, providing substantial headroom above our Group debt covenants (values could fall by 72% before breach2). Our weighted average debt maturity is 5.7 years and our next Group level debt maturity is in 2024
- Our liquidity position is strong with total liquidity of £411 million at 31 March 2020. We increased the drawn position on our £450 million unsecured revolving credit facility, from £66 million to £150 million on 18 March, with our cash on deposit of £111 million exceeding our committed capex to come (£76 million at 31 December 2019)
- In line with our normal convention, a decision about payment of a final dividend will be made once the year end results are finalised in May
- At this stage, we expect to deliver our annual results to 31 March 2020 in line with our existing timetable on Wednesday 20 May 2020, with the external property valuation expected to include a material valuation uncertainty statement
- Net debt at 31 March 2020 using September 2019 property valuations
- In accordance with Group covenants at 30 September 2019 (last measurement date)
- Due to low levels of consolidated net debt, there was no net interest charge under the definition of our covenants. As a result, interest cover was not measureable. Excluding the benefit of capitalised interest cover was 21.7x.
Toby Courtauld Chief Executive
Despite these unprecedented conditions, the GPE team is pulling together well, focussing on our top priorities of the safety and wellbeing of our occupiers, suppliers and employees and ensuring that our portfolio is as prepared as can be for a potentially prolonged period of lockdown. However long the Coronavirus lasts, with our low gearing and ample liquidity, GPE is well positioned to weather the impact until market conditions normalise. In the meantime, unsurprisingly, we expect leasing activity to decline until the crisis passes, particularly in retail, although it is pleasing that a number of our office pre-letting negotiations are ongoing and we continue to receive new enquiries from prospective occupiers.