Great Portland Estates has welcomed signs of “robust” demand in London’s office market, posting upbeat leasing figures and confirming the sale of one of its City properties to JP Morgan at a 5% premium to its March valuation.
In a trading update for the quarter to 30 September, the company said it had signed up £14.3m of new annual rent, with £3.3m of further lettings under offer at 7.3% ahead of the March 2021 estimated rental value, and £38m of new lettings in negotiations.
That includes pre-leasing all of the office space at 50 Finsbury Square, EC2, as well as completing the letting of 16 Dufour’s Place, W1.
Chief executive Toby Courtauld said the company had maintained leasing momentum “as central London continues to reopen and people return to the office”.
“Occupier demand is robust, focusing on prime grade-A space and flex office products, both of which play to our strengths,” he said. “This continued demand for our spaces, combined with our sizeable development pipeline and plentiful liquidity, means we remain well placed to capitalise on the expected growth in the London and UK economies.”
The company has sold 160 Old Street, EC1, held in its Great Ropemaker Partnership joint venture with Ropemaker Properties, to JP Morgan Global Alternatives for £181.5m.
Great Portland refurbished the 166,300 sq ft office in 2018. It is majority let to Turner Broadcasting until 2034, with other tenants including Robert Bosch, Pusher and Sensat Surveying.
Jamie Binstock, Great Portland’s senior portfolio manager, said: “The sale of 160 Old Street concludes an exceptional development project. 160 Old Street remains one of the most technologically advanced buildings in London and will continue to provide a wonderful environment to both the office and retail occupiers. The sale is consistent with our strategy of recycling capital out of mature assets where we have created value.”
Elliot Prosser, head of UK acquisitions at JP Morgan, said: “As the office market transitions towards ‘greener’ buildings, we believe 160 Old Street is well placed to benefit from demand given its excellent ESG credentials and strong emphasis on building amenity. As the return to the office builds momentum, we continue to view London offices as attractively priced and will look to add further properties in the near term.”
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