London landlord GPE sees strong leasing demand but CEO says planning regime ‘challenging’
One of central London’s biggest listed landlords said it had delivered a “strong leasing quarter” but noted rising barriers in the market – including a “more challenging” planning regime.
Great Portland Estate said it signed 12 new leases in the nine months to December at a value of £16.1m. It said market lettings were on average 10.4 per cent ahead of March 2023’s estimated rent value (ERV).
In the last quarter, the West-end focused landlord booked 12 new leases and renewals, generating annual rent of £5m and with market lettings 6.5 per cent ahead of March.
It comes as demand continues to increase for the group’s office spaces as workers return to central London following an upward trend in home working after the pandemic. The company set a record for leases last April, defying a wider downturn in the property market.
Toby Courtauld, GPE Chief Executive, said: “Operationally, we are pleased, once again, to have delivered a strong leasing quarter… This success reaffirms our confidence in our portfolio rental value guidance of +2.5 per cent to +5 per cent growth for the financial year, with the best space potentially higher still.”
However, Courtauld said that despite a recent improvement in the outlook for interest rates, the macroeconomic backdrop remained a challenge, limiting the firm’s activity in investment markets.
GPE’s chief added the landlord was “well placed” for future acquisitions but noted “rising barriers to entry” in its markets, including a more challenging planning regime.
The lion’s share of activity came from the GPE’s Flex office offer, which provides alternatives for companies looking for shorter leases.
The firm recently committed to the refurbishment of 141 Wardour Street, a vacated prime development site in the West End, which is expected to deliver profit on cost in excess of 19 per cent on completion in early 2025.
Two major headquarters developments, the French Railways House in SW1 and Aldermanbury Square, continue to progress well, GPE said, with completion expected in the first quarter of 2026.