UK’s Great Portland forecasts 3%-6% rental growth in prime office spaces

LONDON-FOCUSED property firm Great Portland Estates on Wednesday (May 24) forecast a 3 per cent-6 per cent rental growth in its prime office spaces this fiscal year, but warned of a non-uniform recovery after posting a near 7 per cent fall in its property valuation.

Rising interest rates and macro-economic worries have dampened a tentative recovery in the British commercial property sector from pandemic lows, while the office space portfolio has struggled due to an increased shift to remote-working trends.

“London has continued to recover and is evidently busier than this time last year and centrally-located offices are returning to more normal levels of occupation, and the West End is seeing higher numbers of both shoppers and tourists,” CEO Toby Courtauld said in a statement.

Great Portland said EPRA (European Public Real Estate Association) net tangible assets (NTA) – a key measure that gauges the value of its buildings – fell 9.3 per cent to 757 pence per share for the 12 months ended Mar 31.

The overall portfolio valuation fell 6.6 per cent year-on-year to £2.4 billion (S$4 billion), with office and retail segments declining 7.3 per cent and 4.5 per cent, respectively.

Great Portland’s FTSE midcap peer LondonMetric Property posted an about 24 per cent fall in annual EPRA NTA to 198.9 pence per share.

Separately, LondonMetric said it would buy industrials and logistics property firm CT Property Trust for about 198.6 million pounds. REUTERS