The demand for commercial property London wide continues to grow according to one of the UK capital’s key developers.
Great Portland Estates pinpointed the demand for London offices as a key factor in its success as it announced a boost in rental income from Â£26.5m to Â£34.9m in the six months up to September 30.
The central London based commercial property investment and development firm has a number of buildings scheduled for construction over the next few years as well as 22 committed schemes covering around 1.9m sq ft. In terms of its committed schemes, covering around 439,4000 sq ft, two thirds (67%) of it is already pre-let.
GPE chief executive, Toby Courtauld, said: “We are pleased to report a strong first half performance and another period of outperformance of the London commercial property market; we have delivered material surpluses from our exceptional development programme, attractive West End acquisitions, profitable asset sales, a new joint venture with promising prospects and new financing at a record low cost.”
The group’s portfolio valuation has shot up 6.7% since March 2013 with a 12 month Total Property Return of 14.3%.Â A rental value growth of 3.6, especially buoyed by 2.8% growth in West End offices and 5.8% West End retail.
Current developments include 12/14 New Fetter Lane and the firm has recently created a new joint venture to develop Hanover Square Estate.
Mr Courtauld added: “With a strengthening macro-economic backdrop and supportive property market conditions in the Capital, we expect to see further growth during the second half. London’s businesses are, once more, investing for growth and our limited available space to let is attracting significant interest, enabling us to lease at rates ahead of ERV’s. Meanwhile, central London’s appeal as an investment destination of choice continues unabated.
“Within this positive context, we maintain our confident outlook; our portfolio, 100% in Central London, is full of opportunity; and our conservative gearing and low cost financing will enable us to deliver on our existing growth plans and exploit new opportunities as we find them.”
Great Portland Estates is a property and investment company with its base in central London.Â It owns more than Â£2.3bn of commercial real estate.
By: Kirsty MacGregor
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