Great Portland sees weak market after Brexit vote; posts H1 loss

The London commercial property market looks set to weaken as the UK unravels itself from membership of the European Union, said Great Portland Estates chief executive Toby Courtauld.

Speaking as the company reported a first half pre-tax loss of £62.7m, compared with a £371m profit a year ago, Courtauld said the June referendum result had a negative effect on business confidence “which will likely result in lower economic growth”.

Great Portland's portfolio valuation was down 3.7% with a six month capital return of -3.2% v the IPD Central London index of -3.2%, with total property return of -2.2%.

Total revenue fell to £57.4m from £69.5m. The company reported a loss per share of 19.9p compared with earnings of 108.1p last year.

“Looking ahead, we remain in the early stages of a likely protracted process both to negotiate our exit from the EU and reshape our trading arrangements with the rest of the world, set against both a property market backdrop where we were already experiencing slowing rental and capital value growth and a broad range of global political and economic uncertainties, including the recent US election result,” Courtauld said.

“As a result, we expect London's commercial property markets to weaken further during this period of heightened uncertainty and likely subdued market activity, with the benefits of lower bond yields and weaker Sterling offset by reduced rental growth prospects in a potentially more inflationary environment.”