The Directors of Great Portland Estates plc announce the results for the Group for the six months ended 30 September 20241, with highlights including:
Rights issue proceeds deployment commenced
- Three acquisitions (£106.1 million or £201.0 million including capex) since 1 April 2024, at a 61% discount to replacement cost
- More acquisitions to come, £1.0 billion under review (£125 million in negotiation), plus £0.9 billion on watchlist
Significant liquidity; £670 million5 of cash & undrawn facilities; LTV 23.3%
- New £250 million sustainable sterling bond issued in September; new £150 million RCF in October
- EPRA LTV 23.3%, cash and undrawn facilities £670 million5 ; weighted average debt maturity of 7.0 years5
Strong leasing, 7.0% ahead of ERV2; 8.9% for Fully Managed spaces; 16.2% for space under offer
- 28 new leases and renewals generating annual rent of £10.5 million p.a. across 94,900 sq ft, market lettings 7.0% above March 2024 ERV
- Our committed Flex offer now 525,000 sq ft (55% Fully Managed); targeting growth to one million sq ft
- Rent roll up 2.1% with growth of 99% to come from existing on site developments or 147% including near-term schemes
- Vacancy low at 4.0% (Mar 2024: 1.3%) up as we complete well-timed refurbishments
- Further £7.1 million of lettings under offer, 16.2% above March 2024 ERV
ERVs up 1.1%3, valuation up 0.8%3; EPRA4 NTA per share of 475 pence
- Portfolio valuation of £2.5 billion, up 0.8%3; 0.8% offices (inc. Fully Managed 2.6%) and 1.2% retail
- Rental values up by 1.1%3 (1.2% offices (2.8% Prime, 1.4% Fully Managed) & 0.9% retail); yield expansion of 3 bp
- Portfolio ERV growth guidance maintained at 3.0% to 6.0% for financial year, prime offices 5.0% to 10.0%
- IFRS NAV and EPRA4 NTA per share of 475 pence, up 0.4% since March 2024 pro forma for the rights issue
- EPRA4 earnings £8.5 million, EPRA4 EPS 2.3 pence, down 41.0%, earnings to inflect in FY2025
- IFRS profit after tax of £29.7 million; interim dividend maintained at £11.9 million (2.9 pence per share)
- Expectation of positive TAR in FY 2025 and 10%+ TAR CAGR into medium term
Significant development and refurbishment programme set to deliver £225 million in surpluses
- Good progress at seven on-site development and refurbishment schemes, £394 million capex to come
- Of the three on-site HQ schemes 51% pre let, strong interest in remainder
- Further six near-term schemes, starts from Q1 2025; total capex £401 million
- Combined expected surplus of £225 million, assuming current rents and yields; upside potential
We are pleased to report on another successful operational performance, despite challenging political and economic conditions and fluctuating sector sentiment over the first half. With deep customer demand for prime, sustainable spaces in our core markets and an increasing shortage of such supply, we are well placed to capitalise; our leasing is strong, beating the valuer’s estimates by 7% on average with our spaces currently under offer some 16% ahead. We expect our rents to continue rising, reaffirming our rental growth guidance, as we fill our well-timed and located, sustainable developments and refurbishments, growing our rent roll by some 99% from our existing commitments alone.
We added substantially to our platform for growth during the half through our successful £350 million rights issue in June and a further £400 million of debt issuance since then. With investment capacity in excess of £650 million, and asset pricing at or near cyclical lows, we acquired £106m of new HQ development and Flex opportunities in the West End at deep discounts to replacement cost. With a circa £1 billion pipeline of potential purchases under review, we expect to transact further in the second half, supplementing our exceptional on-site and near-term development programme which already covers 1.2 million sq ft and will generate significant surpluses.
In this context, with our deep and talented team, GPE is in great shape and is positioned for growth. We look to our exciting future with confidence.
1All values include share of joint ventures unless otherwise stated 2 Leasing in period to 30 September 2024 3 On a like-for-like basis 4 In accordance with EPRA guidance. We prepare our financial statements using IFRS, however we also use a number of adjusted measures in assessing and managing the performance of the business. These include like-for-like figures to aid in the comparability of the underlying business and proportionately consolidated measures, which represent the Group’s gross share of joint ventures rather than the net equity accounted presentation included in the IFRS financial statements. These metrics have been disclosed as management review and monitor performance of the business on this basis. We have also included a number of measures defined by EPRA, which are designed to enhance transparency and comparability across the European Real Estate sector, see note 8 to the financial statements. Our primary NAV metric is EPRA NTA which we consider to be the most relevant investor measure for the Group. 5 Pro forma for new RCF and term loan repayment