Great Portland Estates and Land Securities both posted NAV increases of nearly 25% this week in their full-year results to the end of March, as the listed sector continues to benefit from rising capital values.
GPE reported an 18% rise in the valuation of its portfolio to £3.3bn, while the valuation of its development portfolio leapt by 28%. LandSec’s portfolio value rose by 17.3% to £14bn over the period.
The Bluewater mall in Kent, in which LandSec purchased a 30% stake from Lend Lease in June last year for £656m, did not rise in value, however. Chief executive Rob Noel explained that the company had “paid slightly ahead of the game in anticipation of the market improving”.
Despite the headline-grabbing stake, the company was close to neutral in its ratio of acquisitions to disposals over the year. Including Bluewater, LandSec took on another £951m of assets and disposed of £1.1bn.
GPE, however, was a net seller, disposing of £343m of assets and acquiring just £37m.
During the period it committed to a further six development schemes, which are 30% prelet. The portfolio will deliver 25% of the West End’s new buildings in the next four years.
As a result of the increased portfolio values, overall gearing fell for both companies. GPE’s LTV was down to 21.7% from 25.7%, helped by a refinancing of its revolving credit facilities that were close to expiry.
LandSec’s LTV was down to 28.5% from 32.5% despite an increase in borrowing requirements driven by the Bluewater purchase.
david.hatcher@estatesgazette.com
