Two London offices developers announced annual results today that reflect a changing in fortunes for the much-maligned sector.

Great Portland Estates (GPE) posted a 3.6% uplift in the value of its portfolio to £2.9bn, with the offices portion up 4.3%. This contributed to a 4.4% increase in EPRA net tangible assets (NTA) to 494p over the 12 months to 31 March 2025.

Meanwhile, its smaller peer Helical reported EPRA NTA up 5.1% to 348p, driven by a 5.8% increase in its portfolio (development values up 29.1% and standing portfolio up 0.6%).

Despite the trials and tribulations of the office market over the past few years, the central London office market is displaying positive letting fundamentals with tight supply and resilient demand for best-in-class assets.

This was reflected in rental growth at both office developers. GPE reported rental values up by 5.0% (5.3% offices, 7.6% prime offices, retail up 3.5%). The company has upgraded its portfolio ERV growth guidance to 4.0% to 7.0% for 2026, with prime offices ERV growth guided at between 6.0% to 10.0%.

Helical has undertaken a strategic review to strengthen its balance sheet, which has seen it sell off £245m of assets in the year and enter joint ventures to provide capital for its developments. ERV growth on its portfolio over the year was 3.0% on a like-for-like basis, with development ERV up 9.7%.

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GPE chief executive Toby Courtauld said: “Looking forward, despite ongoing macro-economic uncertainty, we believe that many of the conditions necessary for a period of attractive growth in central London’s commercial property values are increasingly evident and we are well placed to prosper; with healthy demand, rents at our well-located, premium spaces will continue rising and we have upgraded our forecasts for the year; we have amassed an enviable pipeline of prime development and refurbishment opportunities covering almost 40% of our portfolio from which we expect to generate material surpluses, given the extreme shortage of such space; London’s growing relative attractions are generating early signs of a reinvigorated investment market which will allow us to crystalise surpluses through asset sales; and our deeply experienced teams and strong financial position will enable us to take full advantage of these supportive conditions and generate attractive returns for shareholders, with a prospective 10%+ annualised return on equity and a threefold increase in EPRA EPS over the medium term.”

Matthew Bonning-Snook, Helical chief executive, said: “In the first quarter of 2025, central London office supply declined by 1% to 22.5m sq ft, while the vacancy rate improved slightly to 8.9%, according to JLL. However, of particular relevance to Helical, new-build vacancy held steady at 1.4% while newly refurbished supply rose to 1.9%, following just two completions. These figures highlight the limited availability of high-quality space.

“Looking forward, this imbalance is set to persist. Beyond 2025, the volume of major new developments falls considerably. Knight Frank projects a shortfall of between 5-7m sq ft of Grade A office space by 2028, whilst 52.9m sq ft of lease expiries are expected between 2025 and 2029. As a result, the undersupply of prime space may continue well into 2029 and beyond.”