GPE receives 63% of March quarterly rent

Great Portland Estates collected 62.9% of its March quarterly rent within seven working days of it being due. A further 4.5% is expected imminently, the REIT said in a trading update. Of the balance remaining, more than 60% of its outstanding rent due is from retail, hospitality and leisure occupiers. These occupiers account for 33% of GPE’s portfolio by rent roll. The firm currently holds rent deposits and bank guarantees totalling £25.8m, including £7.4m from its retail, leisure and hospitality occupiers. Of this, £3.8m relates to New Look, GPE’s largest retail occupier. GPE added in the update that three of its smaller occupiers entered administration during the quarter. The REIT said it was in talks with its retail occupiers over moving to monthly payments and expects an increase in the number taking up this option. Furthermore, it has offered a number of its smaller independent occupiers the option to defer three months’ rent, while it is assessing its larger occupiers on a case-by-case basis. New lettings GPE reported that it had secured four new lettings during the first quarter totalling 10,900 sq ft, which will add £700,000 to the company’s annual rental income. The lettings were 19.1% ahead of March ERV. Another 13 deals covering 127,000 sq ft are under offer and, if they proceed, would provide £9m per year in rent. This includes three office prelets. Development GPE has suspended work at two of its three development sites. Work is still ongoing at its development The Hickman, E1, but work at Hanover Square, W1, and Oxford House, W1,  has stopped as contractors assess how to work within the current government guidelines. GPE said it was too early to assess the impact on the schemes but its earliest long-stop date under existing prelet agreements is June 2022. All of its other buildings remain operational. GPE added that it was continuing to pay its suppliers to ensure their cash flow was maintained. Cash position The firm has an LTV of 14.1% and said values could fall by 72% before it would breach debt covenants. Its total net debt at the end of March stood at £373m with a weighted average debt maturity of 5.7 years and its next group level debt maturity in 2024. It has drawn down more money from its £450m unsecured revolving credit facility, increasing from £66m to £150m on 18 March. It also has a cash deposit of £111m, which exceeds it committed capex of £76m. GPE is still expecting to deliver its results in May, albeit including a material valuation uncertainty statement, and will make a decision on paying its final dividend once these results are finalised. Toby Courtauld, chief executive of GPE, said: “However long the coronavirus lasts, with our low gearing and ample liquidity, GPE is well positioned to weather the impact until market conditions normalise. “In the meantime, unsurprisingly, we expect leasing activity to decline until the crisis passes, particularly in retail, although it is pleasing that a number of our office preletting negotiations are ongoing and we continue to receive new enquiries from prospective occupiers.” GPE said it had also extended its partnership with youth homeless charity Centrepoint to 2022 and increased its annual donation to £75,000. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette