GPE injects £1.1bn into ‘starved’ London office market despite sinking values
GPE, formerly known as Great Portland Estates, is continuing to inject £1.1bn into feeding a “starved” central London office market despite blows from rising interest rates.
The London-listed firm, which yesterday secured a record leasing of the City’s 2 Aldermanbury Square to Clifford Chance, is one of the largest office leasers in the capital.
However, the firm has suffered a dent to its portfolio valuation, which has seemingly rattled investors. Shares sank two per cent to 531.5p per share by early afternoon.
Portfolio valuation tumbled 3.4 per cent to £2.6bn, led by a decline in its range of offices.
In a statement, chief executive Toby Courtauld said: “The central London office market is prospectively starved of new, Grade A supply and we plan to deliver our £1.1bn capex programme into this shortage and a recovering economy.
“Over the past six months, property values in our markets have come under pressure, given the challenging macro-economic and geopolitical environment. However, demand for best in class spaces remains robust, driving strong leasing activity.”
Rent roll has risen while vacancies have dwindled, albeit at a slower rate than in the first half of the year.
Rising interest rates, hike by the Bank of England to tame historically high inflation, have weighed on the portfolio valuations of many of the largest property figures in the city in recent months.
British Land yesterday revealed its portfolio value had fallen three per cent in the past six months. While fellow property trust Landsec booked a nearly £200m loss as interest rates sting and the company shrinks its presence in London.