Booming tenant demand helped London landlord Great Portland Estates rack up a record £25.9 million from new lettings last year, chief executive Toby Courtauld said today.
The company made 84 new lettings across its £2 billion portfolio in the West End and the City over the year to March 31, the biggest of which was to legal firm Bird & Bird at New Fetter Lane.
Even so, GPE predicts office rents should continue to climb by between 5% and 10% over the next 12 months. Liberum analyst Jon Stewart said: “New space remains below long-term averages.
"This is evident in a vacancy rate that remains low at 3.7%.” GPE’s development pipeline — both completed schemes and planning consent won for its Rathbone Square development near Bond Street — also racked up huge profits. Courtauld wants to spend up to £428.1 million on seven more as yet uncommitted projects rather than new acquisitions.
He said: “We don’t need to go into the market today, and that’s a good thing. It’s very competitive with more equity than probably ever before looking to buy in London — there is £28 billion of equity chasing around £2.3 billion of assets available to be bought in the West End and the City.
“We would much rather be working on things we’ve bought and 54% of our portfolio we bought after Lehman Brothers when pricing was more interesting.”
