Great Portland Estates showed its resilience in the face of the market downturn, significantly outperforming its central London benchmark.
The company’s results for the year to 31 March revealed a 2% dip in net asset value to 582p a share and a total property return of 2.6%, 7.4% ahead of the Investment Property Databank central London Benchmark.
The value of its property portfolio was ï¿¡1.6bn at the year end, broadly flat on a like-for-like basis.
‘So long as the economy avoids significant contraction…’
The company was confident that the undersupply of office space in its core West End market would allow it to continue to outperform, but said a lot was dependent on how well the occupier market held up.
‘Against this backdrop of investment market uncertainty, the dynamics of our principal occupational market, the West End, present a more favourably balanced picture with the supply of new office stock remaining restricted,’ chief executive Toby Courtauld said.
‘So long as the UK economy avoids a significant contraction, the key variable, the demand for space, although expected to slow from its recent high levels, should remain around the long-term average.’
The company said that tenant take-up in the West End for the year to March was 5.4m sq ft compared to 5.8m sq ft in 2007, and vacancy rates had risen from 4.3% to 4.5%. It said demand had slowed but this would hit the ‘superprime’ end of the market in terms of rental declines.
Great Portland’s average passing rent is ￡38, much lower it said than the West End average. Shares in Great Portland fell 1.5% to 434p in early trading.
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