11th Nov 2020 09:30
(Alliance News) - Great Portland Estates PLC on Wednesday kept its interim payout steady, but warned of the ongoing damage caused by the Covid-19 pandemic to the central London commercial property market.
For the six months to the end of September, the FTSE 250 property developer and investor posted a pretax loss of GBP154.8 million, compared to a profit of GBP44.4 million a year before. This was on revenue that declined by 29% to GBP38.7 million from GBP54.4 million.
Profit performance was hurt by a severely widened deficit on investment property to GBP114.3 million from GBP8.3 million.
As at September 30, net asset value per share was 800 pence per share, down by 7.8% from 868p on the same date in the prior year. Great Portland's portfolio value dropped by 6.6% year-on-year to GBP2.49 billion from GBP2.65 billion - with office values down 2.4% and retail values down 18% - amid a fall in rental values of 3.9%, especially from retail assets.
Looking ahead, the portfolio rental value is expected to decline by between 5% and 10% for the current financial year.
The like-for-like rent roll was down 4.4% to GBP96.4 million, but with potential future growth of 88% to GBP181 million.
Great Portland Estates declared an interim dividend of 4.7 pence per share, in line with the year before.
Great Portland Estates said as the UK economy dips into an unprecedented recession, activity levels in the central London occupational and investment markets reached near historical lows. Looking ahead, the company expects capital values and rental levels to decline further as property markets adjust to a global recession.
"It is clear that the impact of the Covid crisis will persist for longer than we had hoped and we are engaging extensively with our occupiers and communities, providing assistance where it is most needed. With unemployment rising, albeit from a low level, we should expect rents and capital values in London to fall further," Chief Executive Toby Courtauld said.
"However, we are encouraged by the level of new enquiries we continue to receive from prospective occupiers, particularly for our developments and our flex space product, along with increasing activity in the central London investment market."
Shares in Great Portland Estates were up 2.7% at 717.00 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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