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Annual Results

GPE resilient despite uncertain environment

24 May 2017 07:54

Great Portland Estates has reported report resilient results for the year ended 31 March driven by a strong operational performance.

The group said EPRA NAV per share fell by 5.7% in the year following seven consecutive years of growth delivering a cumulative uplift of 142%, whilst EPRA EPS grew strongly by 28.1% and ordinary dividends per share increased 9.8% to 10.1 pence.

Returns to shareholders were further enhanced by a special dividend of 32.15 pence per share declared last month.

The group said Central London's property markets remained open for business with the weight of international capital and healthy tenant demand supporting the prime investment and occupational markets, despite the slowdown in activity levels over the last 12 months.

Chief executive Toby Courtauld said: "Whilst the market was already slowing ahead of the EU referendum after seven years of consecutive capital value growth, with both rents and yields at record levels, the increased uncertainty following the result triggered a small increase in yields and rental falls.

"Across our portfolio, yield expansion of 15 basis points and rental falls of 1.3% resulted in a 4.9% like-for-like property valuation decline."

He said: "With multiple leasing successes and record levels of capital recycling, we have taken advantage of elevated prices to crystallise development surpluses.

"As a result, our balance sheet has never been stronger and, in addition to our recently declared special dividend, we have raised the final dividend by 14.3%.

"Today, tenant interest is healthy for our brand of high quality, well located, sensibly priced space with £6.9 million of lettings currently under offer at a 2.4% premium to March 2017 ERVs.

"Whilst the weight of international capital looking to invest in London remains high, we expect the uncertain political and economic environment to weigh on rental levels across London's commercial property markets in the near term.

"Looking longer-term, we are optimistic that the capital will retain its status as one of only a handful of truly global cities.

"In this context, GPE is exceptionally well positioned.

"Four years of net property sales combined with our recent refinancing successes gives us unprecedented financial capacity to exploit any market weakness with accretive acquisitions.

"Our investment portfolio is well let, off low average rents and with significant reversionary potential.

"Our remaining committed development projects are already 65% pre-sold with strong interest in much of the balance; our exceptional, income-producing, development pipeline is rich with opportunity, offering more than 1.6 million sq ft of flexible future growth potential, covering 40% of our existing portfolio; and, our first class, refreshed team is ready to capitalise on this period of uncertainty."

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