Great Portland Estates plc (GPE) today publishes its trading update for the quarter to 31 December 2020.
December quarter rent collection ahead of September levels, providing support on a case by case basis
- 77% of December rent collected to date including amounts covered by rent deposits; 69% excluding deposits (84% from office units; 35% from retail/hospitality/leisure sectors; 85% all other sectors)
- 85% of March, June and September rent now collected including drawn deposits; 75% excluding deposits
- £16.5 million of rent deposits/bank guarantees held, of which £2.1 million anticipated to be utilised against outstanding December rent
- All offices open for business with COVID-19 Secure status
Operating well; continued leasing
- £2.4 million of new annual rent signed in quarter. Market lettings in line with March 2020 ERV, including £1.1 million (17,700 sq ft) to Four Communications at The Hickman, E1 on ten-year term (seven-year break)
- Five lettings under offer for £2.0 million (our share: £1.1 million), in line with September 2020 ERV
- Further c.£28 million of new annual rent in negotiation
Good progress across our development programme; work started at 50 Finsbury Square, EC2
- Committed: two projects covering 248,600 sq ft
- Newly committed to major office refurbishment at 50 Finsbury Square, EC2 (129,100 sq ft); market leading sustainability, wellbeing and technology credentials
- Good progress at 1 Newman Street & 70/88 Oxford Street, W1; 31% pre-let, with encouraging levels of occupier interest ahead of expected completion this summer
- Works progressing well with £74.8 million capital expenditure to come
- Near-term: two office schemes (694,400 sq ft); strong occupier interest ahead of potential starts in 2022
- Total pipeline: nine schemes (1.3 million sq ft), all income producing, 2.3 years WAULT, 11.4% reversionary1
Strong financial position; total liquidity of £441 million
- Property LTV2 of 18.2%, weighted average interest rate of 2.5%, weighted average debt maturity of 8.3 years
- Substantial headroom above Group debt covenants
- Cash and undrawn facilities of £441 million
- Existing use of development pipeline at 30 September 2020
- Based on property values at 30 September 2020
"The surge of optimism following the UK approval and roll-out of the COVID-19 vaccines has been overshadowed by the return to more stringent lockdown measures across London. Whilst rental collection rates for the December quarter are ahead of September levels, building utilisation rates have greatly reduced once more and some sectors remain challenged. As expected, a number of our occupiers have been unable to meet their rental obligations and we continue to offer assistance on a case by case basis to support them through this difficult period. We expect the near-term trajectory of the pandemic to remain unpredictable, but, as the vaccination programme progresses, we anticipate that confidence will return and London’s magnetism as a global cultural and business centre will endure, supported by the recent UK-EU trade deal. GPE is well positioned: our low leverage and high liquidity provides resilience and significant capacity for growth; our innovative, flexible spaces remain in high demand and our recent commitment to the development of 50 Finsbury Square, which will be a sustainability, wellbeing and technology exemplar, demonstrates the confidence we have in our product. This strong platform and our extensive development pipeline, combined with our culture of innovation and our talented team, means we are ready to capitalise on this period of uncertainty should opportunities arise."
