First quarter valuation and business update
25 July 2013
In today’s Interim Management Statement, the Directors of Great Portland Estates plc (“GPE” or “Group”) announce an update on trading, as well as the quarterly valuation of the Group’s properties as at 30 June 2013. Details of the Group’s recent valuation and rental value trends are set out in the Appendices.
Key points from the quarter:
Strong portfolio activity drives growth in both capital and rental values
- Portfolio valuation1 up 3.3%, 6.0% and 8.2% over 3, 6 and 12 months respectively
- Continued strong valuation performance from our development portfolio up 16.7%, 26.6% and 30.8% over 3, 6 and 12 months respectively
- Rental value growth1 of 2.1% (1.6% West End offices, 2.7% West End retail)
- EPRA NAV2 per share of 464 pence at 30 June 2013 up 4.0%, 7.9% and 11.3% over 3, 6 and 12 months respectively
- EPRA NNNAV2 per share of 458 pence at 30 June 2013 up 5.5%, 10.4% and 10.9% over 3, 6 and 12 months respectively
Development programme delivering material surpluses
- 95 Wigmore Street, W1 (112,300 sq ft) will complete this week,
85% pre-let, 63% profit on cost, last office floor under offer to let - Five committed schemes (691,700 sq ft), 62% pre-let, expected profit on `
cost of 41% - Planning application submitted for major mixed use development of 414,100 sq ft at Rathbone Place, W1 Major development opportunity from 20 uncommitted schemes, covering 1.8 million sq ft, including five schemes (630,900 sq ft) with potential starts in next 24 months
- Total development programme of 2.5 million sq ft covering 55% of existing portfolio
Disciplined capital recycling and accretive acquisitions
- Disposal of Park Crescent West, W1 for £105.0 million (our share: £52.5 million) at a net initial yield of 2.0% and premium to March 2013 book value of 8.6%. In discussions to sell further c.£150 million of properties
- Oxford House, 76 Oxford Street, W1 purchased in July for £90.0 million (net initial yield of 3.5% rising to c.6.0% post refurbishment)
- Now invested almost 1.5 times the capital raised from shareholders last November
Strong financial position
- Gearing remains conservative at 42.6%, pro forma loan to
property value of 31.6%, weighted average interest rate low at 3.6% - Significant cash and undrawn committed facilities of £261 million
(pro forma: £310 million)
¹ On a like for like basis, including Joint Ventures, see Appendix 1
² In accordance with EPRA guidance
"We are pleased to report a strong start to the new financial year; our limited available space to let is attracting significant interest from prospective occupiers and we are leasing ahead of ERV’s; our development programme is progressing well and has delivered material gains during the quarter; and we have continued to recycle capital into new opportunities. With the acquisition of Oxford House, 76 Oxford Street announced last week, we have now invested almost 1.5 times the capital we raised from shareholders last November, well ahead of schedule...."
"...
Conditions in central London’s economy and its property markets remain supportive. Business confidence continues to strengthen resulting in healthy demand for well-specified, well-located space and we can expect further rental growth from our portfolio. Meanwhile, central London’s appeal as a destination of choice for investment continues unabated. With this positive backdrop and the group’s exciting portfolio of opportunities, we maintain our confident outlook."