The value of Great Portland Estates’ (GPE) property portfolio slumped 10.3% to £2.3bn in the six-month period ended 30 September 2023.
The decline was driven by a 12.4% fall in the value of its retail assets and a 9.6% fall in the value of its office assets.
GPE posted an IFRS loss after tax of £253.4m in the reporting period and recorded an FRS NAV and EPRA NTA per share of 650p – down 14.1% since March 2023.
Rental values increased 1.8% and the company completed 37 new leases and renewals in the six-month period generating annual rent of £11.2m. GPE said it had a further £7.3m of lettings under offer – 7% above March 2023 ERV.
Toby Courtauld, chief executive of GPE, said: “Whilst macro-economic concerns and rising interest rates impacted our property valuation, the fundamentals in our leasing markets remain healthy. With customers increasingly demanding the very best, sustainable spaces, and discounting the rest, they are competing in a market increasingly starved of new, Grade A supply, putting further upward pressure on prime rents and we have upgraded our rental growth forecasts for the second half.
“With further selective yield expansion a possibility, our investment markets remain relatively quiet, although we are exploiting these conditions to our advantage. We bought three buildings in the period, all off market and adding to both our flex and development programmes. Looking forward, we expect further acquisition opportunities to emerge, and with our trademark disciplined capital management, we will continue to recycle capital, selling properties to crystallise value on completion of our business plans.
“In this context, GPE’s positioning is strong; 75% of our portfolio is in the heart of the West End; our substantial capex programme will deliver the prime spaces the market demands; our flex office offer is growing, is well suited to evolving customer needs, as evidenced by our market-leading NPS score, and is delivering our highest rental growth; and our strong balance sheet and plentiful liquidity combined with our long track record of creating opportunities in cyclical markets means that we are well positioned to capitalise. With GPE in great shape, and London set to outperform, we look to our future with confidence.”
