Great Portland Estates has delivered a 2.1% increase in net asset value to 386p a share following a “productive” third quarter.
The central London REIT said the value of its property portfolio had risen by 2.6% in the three months to the end of December predominantly owing to two major prelets to Savills and UBM and other asset management activities.
By sector, the main drivers of the quarterly valuation uplift were West End offices, up by 1.6%, and the company’s development schemes, which rose in value by 9.1% on the back of the prelets.
Its wholly owned portfolio was valued at £1.2bn at the end of the period, reflecting a stable equivalent yield of 5.3%.
The valuation rise and sales undertaken during the period contributed to a 15p increase in NAV a share, before it was reduced by an increased profit-share payment to its partner Eurohypo on the Marcol House redevelopment.
Operationally, voids came down from 3.2% to 2.1%, and £114m of sales were made, 13% ahead of September valuations.
Chief executive Toby Courtauld said: “While macro-economic conditions for the UK as a whole remain challenging, London and its property markets continue to fare relatively well; investor demand, particularly from overseas, remains strong while tenant take-up has increased over the quarter to the long-run average level.
“With low vacancy rates and a scarcity of debt finance keeping the lid on new development starts, we expect the impending shortage of new supply will strongly favour London landlords once sustainable economic growth returns.
“Great Portland Estates has had a productive three months; with some strong leasing and profitable selling, it is our positive actions that are driving our outperformance. With a central London portfolio let off low rents, rich with opportunities for improvement, an enviable development pipeline and financial flexibility, despite the continued economic uncertainty, we remain confident in our ability to deliver further attractive returns to our shareholders”.
bridget.oconnell@estatesgazette.com
