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Great Portland sees its office valuations jump

GREAT Portland Estates yesterday signalled a tentative return to health for the commercial real estate sector as it revealed a jump in valuations over the past quarter and announced a lucrative new West End property deal.<br /><br />Great Portland, which in May tapped investors for &pound;560m in a rights issue, said its properties were valued at &pound;1.05bn at the end of September, after rising 2.6 per cent in the previous three months. <br /><br />Chief executive Toby Courtauld said the group has signed up to new investments and capital commitments worth &pound;140m after the rights issue, with a further &pound;48m in the pipeline.<br /><br />&ldquo;Although rental prospects in the office market remain subdued in the short term, we are seeing signs of life in occupational demand,&rdquo; he said.<br /><br />Great Portland also announced the acquisition of two West End developments, as part of a deal with real estate bank Eurohypo. Under the profit-sharing and debt structuring agreement, Great Portland will buy the sites from current owner, Dubai sovereign wealth fund Istithmar World, for &pound;10m plus a share of future profits. <br /><br />Cazenove analyst Miranda Cockburn said the deal showed an &ldquo;ability to make interesting acquisitions in a supply-constrained market&rdquo;.