Great Portland Estates 'resilient' in tough year

Great Portland Estates announced its results for the year to 31 March on Wednesday, with its portfolio valuation down 4.9% during the year, and down 0.4% n the second half.

The FTSE 250 company put that down to yield expansion of 15 basis points, and a rental value decline of 1.3%.

Its 12 month capital return was a negative 5.1%, compared to a positive 0.4% for the IPD Central London Index.

The company claimed a “resilient” financial performance, with an EPRA net asset value per share of 799p, down 5.7% in the year and 1.7% in the second half.

Net assets stood at £2.74bn, down from £2.91bn over a year earlier.

EPRA earnings were £59.3m, up 24.1% on 2016, while EPRA earnings per share stood at 17.3p, up 28.1%.

After its revaluation deficit, Great Portland’s reported loss before tax stood at £140.2m, swinging from a profit of £555.1m in March 2016.

Total dividends per share were 10.1p, up 9.8% year-on-year.

“We are pleased to report resilient financial results for the year driven by a strong operational performance,” said chief executive Toby Courtauld.

“With multiple leasing successes and record levels of capital recycling, we have taken advantage of elevated prices to crystallise development surpluses.

“As a result, our balance sheet has never been stronger and, in addition to our recently declared special dividend, we have raised the final dividend by 14.3%.”

Courtauld said current tenant interest was “healthy” for Great Portland’s brand of “high quality, well located, sensibly priced” space with £6.9m of lettings currently under offer at a 2.4% premium to March 2017 ERVs.

“Whilst the weight of international capital looking to invest in London remains high, we expect the uncertain political and economic environment to weigh on rental levels across London's commercial property markets in the near term.

“Looking longer-term, we are optimistic that the capital will retain its status as one of only a handful of truly global cities.”

In that context, GPE remained “exceptionally well positioned”, Courtauld claimed.

“Four years of net property sales combined with our recent refinancing successes gives us unprecedented financial capacity to exploit any market weakness with accretive acquisitions; our investment portfolio is well let, off low average rents and with significant reversionary potential; our remaining committed development projects are already 65% pre-sold with strong interest in much of the balance; our exceptional, income-producing, development pipeline is rich with opportunity, offering more than 1.6 million sq ft of flexible future growth potential, covering 40% of our existing portfolio; and, our first class, refreshed team is ready to capitalise on this period of uncertainty.”