17th Jan 2007 07:00
Great Portland Estates PLC17 January 2007 17 January 2007 Great Portland portfolio value up 6% in Q3 The Directors of Great Portland Estates plc ("GPE") announce the quarterlyvaluation of the Group's properties as at 31 December 2006, the details of whichcan be found in the attached tables (see appendix 1). (Please copy and paste thefollowing link into your web browser: http://www.rns-pdf.londonstockexchange.com/rns/6365p_-2007-1-16.pdf ) Highlights of the quarter: • Valuation of portfolio including share of joint ventures up 6.1% at £1,417.8 million. • Adjusted NAV per share* up 7.2% to 550p. • REIT NNNAV per share* up 8.4% to 530p. • Valuation of acquisitions up 20.1% net of costs. • Portfolio ERV growth of £2.5 million (up 3.7%). • West End office ERV increased by £2.0 million, or 4.6%. • Strong letting activity continues with £1.4 million of new rents secured through lettings. • Conversion to UK-REIT status on 1 January 2007 eliminating £126.7 million of contingent capital gains tax by paying a conversion charge of £28.4 million. • Over £87 million of capital transactions including £52.0 million of purchases and £35.3 million of sales. * Estimate based on valuation increase and other items, see table below. Toby Courtauld, Chief Executive of GPE said, "As we enter the REIT regime, theGroup is in great shape. We have continued to find good acquisitions in afiercely competitive market and our growing development programme is both welltimed and well located, being predominately in the supply-constrained West Endof London. With take-up of office space running ahead of the long term averageand rents growing across the Capital, we look forward to continuing this strongperformance during 2007". Valuation The valuation of the Group's properties as at 31 December was £1,417.8 millionincluding our share of joint venture assets. All properties, includingacquisitions and our share of joint ventures, rose in value by £81.4 million or6.1% since 30 September 2006. More than half of the investment portfoliovaluation uplift was due to asset management activity and the creating of rentalgrowth with the balance coming from yield compression. Rental values grew across the portfolio by 3.7% during the quarter, building onthe 6.3% recorded for the six months to 30 September 2006. West End officerental values were 4.6% higher whilst City and Southwark rental values rose by2.0%. The Group average office rental value remains low at approximately £38.20per sq ft, some £6 per sq ft higher than the average office rent passing. Thewholly owned portfolio true equivalent yield fell 13 basis points over thequarter and now stands at 4.9% (4.8% for joint venture properties). Estimated NAV per share and financing The portfolio valuation movement of £81.4 million for the three months to 31December 2006 has been used to estimate pro forma NAV per share amounts.Adjusted NAV per share as at 31 December 2006 was estimated at 550p (up 7.2% onSeptember 2006), whilst REIT NNNAV per share was estimated at 530p (up 8.4% onSeptember 2006). Adjusted NAV per share saw less growth in the quarter becauseit did not benefit from a reduced mark to market of debt following the debenturebuy back carried out in December 2006. Details are set out in the table below. Proforma unaudited estimated balance sheet highlights £m Pence per % share Change------------------------------------------------------------Adj NAVAt 30 September 2006 928.1 513 Valuation uplift 81.4 45Interim dividend (6.1) (3)Debenture buyback (9.1) (5) At 31 December 2006 994.3 550 +7.2% REIT NNNAVMark to market of debt (6.4) (4)REIT Conversion charge (28.4) (16) At 31 December 2006 959.5 530 +8.4% At 30 September 2006 884.3 489------------------------------------------------------------ Note: The pro forma balance sheet does not include retained earnings for the quarter Net debt at 31 December 2006 was £417 million, up £38 million from 30 September2006 due to the completion of the Hanover Square/Prudential Property swap andcapital expenditure on developments. Gearing at 43% was unchanged from the levelas at 30 September 2006. On 1 January 2006 the Group converted to UK-REIT status and is due to pay aconversion charge estimated at £28.4 million by 14 July 2007, removing £126.7million of contingent Capital Gains Tax. Investment activity Two acquisitions were made by the Group during the quarter, both in the West Endand adjoining existing holdings on New Bond Street and on Oxford Street, for atotal consideration of £52.0 million including costs. They performed stronglyduring the quarter rising in value by an average of 20.1%. One sale wascompleted during the quarter at an aggregate price of £35.3 million, in linewith its 30 September 2006 valuation. Letting and development Letting activity remains healthy across the business. Of note, the final floorof Met Building, Percy Street, W1 was let during the quarter at a rent of £52.50per sq ft whilst two of the recently refurbished floors at Bond Street House, W1have been let at an average rent of £81.00 per sq ft. The near-term development pipeline is progressing well. 180 Great PortlandStreet, W1 was completed on time and on budget in December and we are confidentas to its letting prospects. Refurbishments of 31,000 sq ft at Elsley House,Great Titchfield Street, W1 and 22,000 sq ft at Kent House, Market Place, W1 areboth due to complete in February. Meanwhile, construction work is progressingwell at both the 90,000 sq ft 60 Great Portland Street, W1 (formerly KnightonHouse) and at the 110,000 sq ft Titchmor scheme on Mortimer St, W1. Contacts: Toby Courtauld Chief Executive Great Portland Estates plc 020 7647 3042Timon Drakesmith Finance Director Great Portland Estates plc 020 7647 3034 FinsburyJames Murgatroyd 020 7251 3801Gordon Simpson 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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