London landlord Great Portland Estates confident capital will bounce back after Covid
London commercial landlord Great Portland Estates reported that tenants have struggled to pay their rent due to the impact of lockdown measures on trading, but said the Covid-19 vaccination programme is the light at the end of the tunnel.
December quarter rent collection was ahead of September levels, with Great Portland Estates receiving 77 per cent of the payment due.
The landlord collected 84 per cent from office occupiers but just 35 per cent from retail, hospitality and leisure tenants, as those sectors have been the hardest hit by the current lockdown restrictions.
Chief executive Toby Courtauld said the second wave of the virus had dampened optimism caused by the news of vaccine approvals.
But he added that “London’s magnetism as a global cultural and business centre will endure”, after jabs are rolled out.
The company’s share price jumped two per cent following the optimistic update.
Despite the challenges presented by the pandemic, Great Portland Estates signed £2.4m of new annual rent during the quarter and has five lettings under offer for £2m.
A further £28m of new annual rent is under negotiation, the FTSE 250 firm said.
Great Portland Estates said good progress had been made across its development programme, and it has committed to two new projects covering 248,600 sq ft.
The firm also has two new office schemes in the pipeline which have received “strong occupier interest” ahead of potential starts next year.
In total, there are nine new projects on the horizon, amounting to 1.3m sq ft.
Great Portland Estates chief executive Toby Courtauld said: “The surge of optimism following the UK approval and roll-out of the Covid-19 vaccines has been overshadowed by the return to more stringent lockdown measures across London.
“Whilst rental collection rates for the December quarter are ahead of September levels, building utilisation rates have greatly reduced once more and some sectors remain challenged.
“As expected, a number of our occupiers have been unable to meet their rental obligations and we continue to offer assistance on a case by case basis to support them through this difficult period.
“ We expect the near-term trajectory of the pandemic to remain unpredictable, but, as the vaccination programme progresses, we anticipate that confidence will return and London’s magnetism as a global cultural and business centre will endure, supported by the recent UK-EU trade deal.”