GPE swings to an £86m half-year loss
Great Portland Estates has swung to an £86.7m half-year loss, as values took a 3.4% hit.
The REIT has shared the same fate as British Land and Landsec, which announced similar half-year losses earlier in the week.
Chief executive Toby Courtauld said: “Over the past six months, property values in our markets have come under pressure, given the challenging macroeconomic and geopolitical environment.”
Great Portland Estates has swung to an £86.7m half-year loss, as values took a 3.4% hit.
The REIT has shared the same fate as British Land and Landsec, which announced similar half-year losses earlier in the week.
Chief executive Toby Courtauld said: “Over the past six months, property values in our markets have come under pressure, given the challenging macroeconomic and geopolitical environment.”
The results have tanked GPE’s bottom line, turning the £62.4m pretax profit for H1 2021 into a £86.7m loss. EPRA earnings were £11.4m, down 39.0% on H1 2021.
While rents remained stable and other activity was strong, a 3.4% dip in values took the total portfolio down to just over £2.6bn. Offices fared worse, with values falling by 3.9%.
Courtauld added: “Demand for best-in-class spaces remains robust, driving strong leasing activity, best illustrated by our own record leasing since March, growing prime office rents and enabling us to continue recycling capital out of mature assets at near cycle-low yields.”
He said GPE would weather the current economic storm because of the quality of its portfolio. “While economic challenges may persist in the near term, our experience is that many customers are looking through the downturn in assessing their real estate needs, seeking to trade up to great spaces that are fit for future working patterns. In that context, GPE is well placed; the central London office market is prospectively starved of new grade-A supply and we plan to deliver our £1.1bn capex programme into this shortage and a recovering economy.”
GPE has a 1.5m sq ft pipeline, which it said would take full advantage of a “supply drought”, including French Railways House, W1, and 50 Jermyn Street, SW1, which recently received planning consent.
It has also committed to develop the 321,000 sq ft 2 Aldermanbury Square, EC2, after securing a 20-year prelet from Clifford Chance, worth £24.7m pa.
In addition, Courtauld said: “Our flex office offer is growing well, delivering our highest rental growth through providing great service to customers; and our strong balance sheet, low leverage and plentiful liquidity combined with our long track record of creating opportunities in volatile market conditions means that we are well positioned to capitalise. GPE is in good health and, against this backdrop, we look to our future with confidence.”
GPE said it was on track to deliver 650,000 sq ft of “fitted and fully-managed” flex space by 2027.
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Photo from GPE
