Great Portland estates remains optimistic despite 4% fall in property values

Permalink: Great Portland estates remains optimistic despite 4% fall in property values
by Lin Freestone

Great Portland Estates, a central London property investment and development company, issued an interim trading statement this week which indicated an optimistic outlook even though the economic situation is expected to worsen during the rest of the year.

The valuation of the group’s properties at the end of June was £1,539.8m, including its share of joint venture assets. This valuation showed a drop of £63.9m since the end of March, a fall of 4%.

Toby Courtauld, the chief executive of Great Portland Estates believes that with low gearing, a tight focus on an under-supplied location and careful active management, far from being a takeover target, his company is set to outperform the rest of the sector.

Mr Courtauld’s conviction that the company will survive a downturn is underpinned by the company’s focus on the office market in London’s West End, which makes up 75% of its portfolio.

There is a broad base of tenants in its mid-market area around Oxford Circus, and average rents are at £35 per sq ft. The West End has a very tight planning regime and has even less office space available to rent this year than it had last year.

Retail properties in the prime shopping streets of Regent Street, Bond Street and Oxford Street have benefited from the weaker pound and high-spending tourists, and Great Portland has recorded rent increases of 2.1%.

The company has funding in the region of £300m available for potential acquisitions.