Mood “less urgent”, says GPE
Great Portland Estates chief executive Toby Courtauld describes the current sentiment in the London commercial property market as a “less urgent mood” and says he expects this to persist for the rest of the year.
In an update on trading issued to the London Stock Exchange this morning, the group said that while the property investment market in London had continued to recover during the three months to 30 June, the rebound was at a lesser pace than the “unsustainably high” rates seen in the previous six months.
Great Portland says it has been encouraged by the demand levels it has seen from prospective tenants, which has helped support rental growth across its portfolio. “Whilst we expect sentiment to remain relatively volatile in the near term, looking two or three years ahead, we maintain our confidence in London as a global financial centre,” Courtauld added. “With a prospective supply/demand balance that favours the landlord, we can expect rents to rise over this timescale,” he noted.
The group today reported a 2.5% increase in the rental values of its West End office properties for the quarter, while its City and Southwark office rental values rose by 1.8%. It said retail demand had been resilient and rental values in its West End retail portfolio increased by 1.8% in the quarter.
Great Portland expects its joint venture with Starwood Capital to complete the acquisition of City Tower and City Place House in EC2 by the end of this month. In June the group bought 35 Portman Square, W1 for £53m reflecting a net initial yield of 7.7%.
