Great Portland Estates has announced a 9.2% leap in net asset value to 487p a share as its West End portfolio continues to deliver strong growth.
The central London specialist said its portfolio had risen in value by 6.7% in the six months to the end of September, driven by a whopping 15.8% uplift in its development pipeline.
Its net assets are now valued at £1.6bn.
GPE said it made a 61% profit on cost at its fully let 112,000 sq ft office development at 95 Wigmore Street and 31.5% profit on cost “so far” at its 138,300 sq ft refurbishment of City Tower, EC2, both of which completed during the period.
From its three committed schemes, New Fetter Lane, EC4; Walmar House, W1; and Blackfriars Road, SE1; it is expecting profit on cost of 36.7% after completions from February.
Looking ahead, it outlined significant development opportunity from 22 uncommitted schemes, covering 1.9m sq ft, including five schemes (659,200 sq ft) with potential starts in the next 24 months.
GPE’s total development programme is 2.3m sq ft, comprising around half of its existing portfolio.
During the period it reported rental value growth of 3.6% led by a 5.8% increase in West End retail rents, and a 2.8% rise in offices.
GPE made an adjusted profit before tax of £18.1m, more than double 2012’s figure. Including its revaluation surplus, its profit before tax is £146.9m.
It sold £166m of assets during the period – some out of joint ventures – at an average of 4% ahead of book value.
The REIT maintains conservative gearing at at 46.9%, reflecting a loan-to-property-value of 28.7%. Its weighted average interest rate is at a record low of 3.2%, giving it £503m of financial firepower.
It has announced an interim dividend of 3.4p a share.
Chief executive Toby Courtauld said: “We are pleased to report a strong first-half performance and another period of outperformance of the London commercial property market; we have delivered material surpluses from our exceptional development programme, attractive West End acquisitions, profitable asset sales, a new joint venture with promising prospects and new financing at a record low cost.
“With a strengthening macro-economic backdrop and supportive property market conditions in the capital, we expect to see further growth during the second half. London’s businesses are, once more, investing for growth and our limited available space to let is attracting significant interest, enabling us to lease at rates ahead of ERVs.
“Meanwhile, central London’s appeal as an investment destination of choice continues unabated.
“Within this positive context, we maintain our confident outlook; our portfolio, 100% in central London, is full of opportunity; and our conservative gearing and low cost financing will enable us to deliver on our existing growth plans and exploit new opportunities as we find them.”
