WEST End developer Great Portland Estates (GPE) said yesterday it would splurge £500m on its development pipeline as it looked to take advantage of London’s booming office market.
The FTSE 250 property firm beat analyst expectations as it posted an 11.8 per cent rise in net asset value per share to 636p in the six months to 30 September.
Its vast portfolio of properties is now worth £3bn, up 8.9 per cent on a like-for-like basis since 31 March.
The firm is currently on site at three schemes, including Rathbone Square, which is its largest-ever scheme and accounts for almost 80 per cent of the 522,000 square feet of space under development.
It is poised to start work on a further eight developments within the next two years, including 73/89 Oxford Street, a retail and office block near Tottenham Court Road and 148 Old Street in London’s tech area, which is currently let to the Royal Mail.
Work on Great Portland’s 207,000 sq ft Hannover Square development next to Bond Street’s Crossrail station is also expected to get underway in 2016.
The group has been selling properties to help fund its new developments, including New Fetter Lane, which it sold this week for £166m and its remaining 12.5 per cent stake in the 100 Bishopsgate site for £15.8m to Brookfield.
Rising employment and increasing economic confidence is prompting businesses to expand and move offices, which in turn is benefiting developers such as Great Portland.
The group said it secured 41 new lettings in the period generating £9.7m of annual rent and helping to reduce its vacancy rate to 2.3 per cent compared to 3.7 per cent at 31 March.