Great Portland reaffirms ERV guidance after strong quarter

London real estate developer Great Portland Estates reaffirmed annual rental value guidance after a strong three months to the end of September, adding that an improving economy, falling interest rates and scarcity of supply would drive growth.

The company said it had delivered £6.1m of new lettings, bringing the total for the financial year to date to £10.5m, 7% ahead of the estimated rental value (ERV), "with our fully managed spaces outperforming once more".

GPE said that with economic conditions improving and interest rates now falling there was strong demand for company headquarters and flexible working "is enabling us to lease ahead of expectations in a market starved of such centrally-located, quality space".

"With £8.8m of lettings currently under offer at a 16% premium to ERV, we reaffirm our confidence in our portfolio rental value guidance of +3.0% to +6.0% growth for the financial year," it added.

After a £350m rights issue and £250m debt issuance since results in May, GPE said it was confident it could snap up accretive acquisitions.

"We have around £100m under offer, fully aligned to the acquisition criteria we set out in May. Beyond this, we have a further £1.6bn under active review or on our watchlist to buy."

Reporting by Frank Prenesti for Sharecast.com