Great Portland Estates bumped its forecasts for the next year after strong performance from its prime and fully-managed offices in the year to 31 March.
The REIT’s portfolio valuation was up by 3.6%, with offices up by 4.3% and fully-managed offices up by 12.8%. EPRA earnings came in at £20.2m, with IFRS profit after tax at £116m and dividends held at £31.9m – or 7.9p per share.
Rental values were also up by 5%, with offices again outstripping the average with growth of 5.3% on average and 7.6% among the company’s prime offices. Retail values were up by a more modest 3.5%. As a result, yields expanded by 12 bp.
Portfolio growth guidance has been upgraded from 4% to 7% for 2026, with prime offices seeing an upgrade from 6% to 10%.
The company has allocated £325m of rights issue proceeds on four acquisitions worth £162m plus capex.
This includes the company’s acquisition of Whittington House, at 19-30 Alfred Place, WC1, for £58.5m, as well as the recent acquisition of the HQ development opportunity at One Chapel Place, W1, for £56m.
It acquired the latter with plans to “materially increase the scale of the building”, setting a target to achieve planning permission ahead of vacant possession in 2028.
The REIT has, however, lined up £350m worth of disposals, more than half of which are already under offer.
The company also reported strong leasing activity, beating ERV by 10.6% with £37.7m signed.
Global investment firm Clayton, Dubilier & Rice’s pre-let of 30 Duke Street also delivered an additional £17.6m since the year end at a 5.5% premium to March 2025 ERV. The company predicted this would deliver a 35.1% profit and a 7.1% development yield.
Total rent roll was up by 15% to £123m, with organic growth potential of 131%.
Toby Courtauld, the company’s chief executive, said London’s commercial property values were on the rise, despite the macroeconomic uncertainty facing currently facing the market.
“We are well placed to prosper,” Courtauld said. “With healthy demand, rents at our well-located, premium spaces will continue rising and we have upgraded our forecasts for the year.”
He added: “We have amassed an enviable pipeline of prime development and refurbishment opportunities covering almost 40% of our portfolio from which we expect to generate material surpluses, given the extreme shortage of such space.”
The company reported good progress at seven of its on-site development and refurbishment schemes, with £357m of capex still to come.
These included, among others: Minerva House at 5 Montague Close, SE1, expected to complete in Q3 2026 and deliver a profit on cost of 19% after strong leasing interest in the building; 2 Aldermanbury Square, EC2, which law firm Clifford Chance has pre-let all 322,600 sq ft of the office space in and is expected to complete in Q1 2026; and two refurbishments at 141 Wardour Street, W1, and 170 Piccadilly, SW1, which are on track to deliver 55,000 sq ft of fully-managed space this summer.
The company also reported strong liquidity following a new £250m sustainable sterling bond issue in September, as well as a new £150m revolving credit facility in October.
As a result, the company reported £376m of cash and undrawn facilities available, with an LTV of 30.8% and a weighted average debt maturity of 5.2 years.
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