Great Portland Estates 'well-positioned' for Brexit

Great Portland Estates updated the market on its trading for the quarter to 30 June on Thursday, confirming it signed 10 new lettings during the period, generating annual rent of £3.2m for the company.

The FTSE 250 firm said it secured £3.5m per annum through the settlement of four rent reviews, and had 11 lettings under offer totalling £5.5m of rent for the company.

Its vacancy rate remained low at 3.1%, with 99.8% of rent collected within seven working days.

“I am pleased to report another quarter of strong activity delivering further leasing successes across our West End focused portfolio,” said chief executive Toby Courtauld.

“Whilst tenant interest levels are currently healthy for our limited available space, it is likely that the uncertainty created by the EU referendum result will have a negative impact on economic growth in London.”

Courtauld said that in the near-term, the company expects confidence to reduce and some business investment decisions to be deferred while negotiations to establish the UK’s trading arrangements with the EU are undertaken.

“As a result, we can expect London's commercial property markets to weaken during this period of uncertainty with the benefits of lower bond yields and weaker sterling offset by reduced rental growth prospects.”

Courtauld remained confident that Great Portland Estates was well-positioned despite the economic outlook.

“Following three years of net property sales, our balance sheet has never been stronger with gearing at record low levels, giving us significant financial capacity to take advantage of any market weakness; our committed development programme is materially de-risked, being 62% pre-let or pre-sold; our investment portfolio is almost fully occupied, off attractively low rents, with minimal exposure to financial services tenants, and includes an exceptional future development pipeline with flexible start dates; and we have a first class team ready to capitalise on this period of uncertainty,” he explained.