Earnings, net assets jump at GPE after record leasing year

(Sharecast News) - Great Portland Estates reported a sharp rise in annual earnings and net assets after a record leasing year, asset sales above book value and further progress across its development pipeline.

The FTSE 250 central London property company said it signed 88 new leases and renewals in the year ended 31 March, generating annual rent of £70.9m, 10.3% ahead of March 2025 estimated rental value.

Its rent roll increased 46%, with further organic growth potential of 95%.

The portfolio valuation rose 4.3% on a like-for-like basis to £3.0bn, including a 5.4% increase in offices and a 22.2% rise in developments.

Rental values increased 5.8%, driven by 6.3% growth in offices, including 7.2% in prime offices, while retail rental values rose 1.6%. Yields expanded by 11 basis points.

IFRS net asset value and EPRA net tangible assets per share rose 6.1% to 524p.

IFRS profit after tax was £154.5m, while EPRA earnings increased to £34.5m and EPRA earnings per share rose 63.5% to 8.5p.

The total dividend was increased to 8.2p per share.

GPE said return on equity was 7.9% over the last 12 months, showing progress towards its target of more than 10% for the 2027 financial year.

The group completed four disposals for £490m, 2.3% ahead of March 2025 book value, at a capital value of £1,251 per square foot.

It also made two acquisitions for £69m, adding to its Fitzrovia cluster at £592 per square foot.

GPE said £200m of sales were under consideration, with potential for more than £1.0bn of further sales over the medium term.

The company completed 2 Aldermanbury Square, EC2, on time and on budget, with the scheme fully pre-let.

It also made progress on five on-site development and refurbishment schemes, with £223m of capital expenditure still to come.

Three on-site headquarters schemes are now about 50% pre-let, including lettings to CD&R and Quantexa during the year.

GPE also delivered three fully managed schemes totalling about 77,000 square feet and said leasing progress had been strong.

A further three headquarters schemes remain in the pipeline, with planning secured at St Thomas Yard, SE1.

The company said its developments and refurbishments offered an expected surplus of £131m at current rents and yields, after allowing for construction cost inflation, rising to £260m if rents increase by 10%.

GPE signed a new five-year £525m revolving credit facility in October, with a headline margin of 105 basis points over SONIA.

Moody's confirmed its Baa2 long-term issuer rating. EPRA loan-to-value stood at 28.6%, with cash and undrawn facilities of £412m and a weighted average debt maturity of 5.4 years.

Chief executive Toby Courtauld said the group had delivered "numerous operational successes" despite macroeconomic and geopolitical uncertainty.

He said GPE had achieved record leasing significantly ahead of rental values, made opportunistic acquisitions at a discount, completed £0.5bn of asset sales at a premium and delivered some of London's highest-quality spaces into a severely undersupplied market.

"Whilst the external environment remains volatile, we are well positioned to build on this momentum; demand for our premium HQ and Flex spaces is strong and our pipeline is long, concentrated in the most sought-after, core locations," Courtauld said.

"As a result, we remain confident we can deliver a cost of capital beating outcome for the forthcoming financial year and substantial income and value growth over the medium term."

At 1016 BST, shares in Great Portland Estates were up 1.75% at 307.7p.

Reporting by Josh White for Sharecast.com.

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