7th Jul 2016 06:42
LONDON (Alliance News) - Property developer Great Portland Estates PLC on Thursday said it is well-positioned to navigate the challenges facing the commercial property sector following the UK's decision to leave the European Union, with trading solid in the first quarter of its financial year.
Toby Courtauld, chief executive of the central London-focused property group, said that, while tenant interest levels are currently healthy for the company's available space, the uncertainty caused by the Brexit vote is likely to have a negative impact on economic growth in the capital.
"In the near-term, we expect confidence to reduce and some business investment decisions to be deferred whilst negotiations to establish our trading arrangements with the EU are undertaken. As a result, we can expect London's commercial property markets to weaken during this period of uncertainty with the benefits of lower bond yields and weaker sterling offset by reduced rental growth prospects," he said.
Within this "more challenging economic context", Courtauld said the group is well-positioned, with a robust balance sheet in place and gearing at record low levels, giving it significant financial capacity to capitalise on any weakness in the market.
His comments came at Great Portland said it secured ten new lettings in the first quarter to the end of June, adding GBP3.6 million in annual rent to its income stream. Its vacancy rate is currently at 3.1% and the group said its development schemes are currently 62% pre-let or pre-sold.
By Sam Unsted; [email protected]; @SamUAtAlliance
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