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Great Portland reports strong operational performance

Great Portland reports strong operational performance – Great Portland Estates (GPOR) has released its results for the year to 31 March 2018.

The company reported a year of robust operational performance that has delivered good financial result. This includes including successes with assets that are leased to multiple types of tenents. It also includes profitable capital recycling into other areas

The company reported that its EPRA NAV per share rose by 5.8% in the year, whilst EPRA EPS grew by 17.9%. The ordinary dividends per share increased by 11.9% to 11.3p.

The NAV of the company was £2,367 million at 31 March 2018 and delivered diluted IFRS EPS of 18.2 pence.


Valuation growth of 2.9% – driven by development performance
  • Portfolio valuation up 2.9%1 in year (developments: up 7.0%1) and up 1.9%1 in H2
  • Yield contraction of 0.01% and rental values up 0.3% (H1: +0.7%, H2: -0.4%; -0.6% offices, +3.0% retail)
  • 12 month capital return of 2.5% v 4.7% for IPD Central London (10 year annualised capital return: 6.1% v 5.1%)
  • Rental value growth guidance for new financial year: range of +1.0% to -2.5%
Financial performance – increased EPRA NAV, earnings and dividends
  • EPRA NAV per share of 845 pence, up 5.8% in year and 3.9% in H2; total accounting return of 7.1%
  • Net assets of £2,366.9 million (March 2017: £2,738.4 million), after the return of £416 million to shareholders
  • EPRA earnings of £66.5 million, up 12.1%.
    • EPRA EPS of 20.4 pence, up 17.9%.
    • Cash EPS of 17.0 pence, up 68.3%
  • After revaluation surplus, reported IFRS profit before tax of £76.7 million (March 2017: loss of £140.2 million)
  • Total dividends per share of 11.3 pence (2017: 10.1 pence), up 11.9%, with final dividend of 7.3 pence, up 14.1%
Leasing, ahead of ERV and capturing reversion – 53% rent roll growth potential
  • 68 new lettings (469,700 sq ft) securing annual income of £31.1 million, market lettings 2.6% ahead of March 17 ERV
    • Record investment lettings of £19.2 million, 3.4% ahead of March 2017 ERV
    • Two major pre-lets to Turner Broadcasting and KKR securing £11.4 million (both on 15 year terms)
  • 34 rent reviews settled securing £18.3 million; 29.6% above previous passing rent, 3.2% ahead of ERV
  • Successfully trialled flex space offering across 12,000 sq ft, securing rent at 35% premium to net effective rental value. Appraising further c.100,000 sq ft across existing portfolio
  • Vacancy rate of 4.9%, average office rent only £54.60 sq ft, reversionary potential of 12.1% (£13.0 million)
  • Rent roll of £107.3 million (up 7.0%), with total potential future growth of 53% to £164.1 million


“Whilst we expect, and are planning for, continued economic uncertainty, we look to our future with confidence: although we can expect a softening in market rents and some secondary asset yields, occupier demand remains healthy across our retail and office portfolio. With London’s investment markets remaining competitive, we have no need to buy, preferring the relative returns on offer from investing in our portfolio. It is full of opportunity, including 1.7 million sq ft of development potential, 0.4 million sq ft of which is now on site. In addition, our low average rents provide us with plenty of reversion to capture and our talented team is ready to capitalise on our many opportunities for organic growth as we continue to broaden our offering to meet evolving occupier needs. Either way, after five years of net sales, we have the financial strength to exploit any market weakness where we unearth it.”

GPOR : Great Portland reports strong operational performance

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