The property company Great Portland Estate (GPE) is experiencing positive results as the demand for retail and office spaces in London continues to rise with the return of workers to the city. In its half-year results statement, GPE expressed its strong position for the return of the market cycle, which is a welcome development considering the challenging market conditions that have caused a decline in property values in recent years.
GPE reported a 10.3% decrease in the current value of its portfolio, primarily driven by a 12.4% decline in the value of its retail properties. However, despite this setback, the company remains optimistic about the future. One encouraging aspect of GPE’s results is the significant number of workers who have returned to offices across its portfolio in the West End. Around 75% of workers have come back, and this number rises to 93% near Elizabeth Line stations. This is positive news for retailers as it suggests that footfall and consumer spending are likely to increase.
Additionally, the market lettings for GPE have been promising, with an average of 13.4% higher than the estimated rental value in March 2023. The company’s annual rent role currently stands at £11.2 million.
Toby Courtauld, CEO of GPE, acknowledges the macro-economic concerns and rising interest rates that have impacted property valuation. However, he remains optimistic about the leasing market, stating that the fundamentals are healthy. There is a growing demand for high-quality, sustainable spaces, but there is a shortage of new Grade A supply in the market, leading to higher prime rents. GPE has upgraded its rental growth forecasts for the second half of the year. With its strong position and the expectation of London’s outperformance, GPE looks towards the future with confidence.
Useful links:
– For more information on the property market in London, visit the official website of the Mayor of London.
– To learn more about sustainable spaces and their impact on the real estate industry, explore this guide by the World Green Building Council.
