Great Portland Estates has posted strong leasing activity, rising rents and portfolio values for the six months ended 30 September 2025.
Speaking to CoStar News, Toby Courtauld, chief executive, said: "We have set out to do a bunch of stuff and we have been delivering on that. It is an important mantra for any management team. The results are dominated by some very strong leasing – customers are liking what we are doing and coming into our buildings in good numbers and the truth is they have not got many options. What you see is 36% of our development book is in some form of production as we deliver into an incredible supply drought."
Courtauld said the supply shortage is helpful in that it pushes rents up, but not if occupiers have to look at other cities around the world. "It is not happening yet. Forty percent of our building Minerva House on the South Bank is under offer to let at a circa 30% premium to [estimated rental value]."
Despite the market dynamics for prime London offices, the share prices of the key London landlords such as GPE continue to be weighed on by wider economic issues.
"It is very frustrating," said Courtauld. "The share prices are simultaneously driven by macro forces outside of our control. Today the news is about the potential for recession in the US and everything is in the red. But behind that if you look at our calendar year to date the performance we have is our share price has been been running much faster than our direct peers. It is best to look at that longer duration time horizon. Investors are responding to low gearing and stacks of opportunity to generate growth in our portfolio."
GPE is reviewing around £650 million to £700 million of sales in the longer-term with its major developments at Hanover Square and 2 Aldermanbury Square flagged as likely longer term disposals once the assets are fully stabilised.
In terms of the upcoming Budget, Courtauld says the "lack of clarity and consistency" from government is unhelpful. "The government was elected on a mandate for growth and have not shown any evidence of that and they need to. Indeed the evidence is policies that are anti-growth and they are related to employment taxes – we hope there is no more of that. That said we do think despite politicians of all hues not understanding how important it is to support growth in recent times, London's number of jobs has managed to grow."
Courtauld says the ratio of companies looking to grow rather than shrink office space is increasing. "That plays to our strength of worrying about providing spaces as good as they can be for companies."
Nick Sanderson, GPE's outgoing chief financial officer, said in terms of the tenant base "a lot is staying the same" with corporates in financial services and professionals services continuing to drive demand. "That said 23% of our fully managed space is being taken by AI-led businesses. We expect to see continued demand across all products from all businesses, London is the AI capital of Europe but equally those firms most expected to be impacted such as law firms and professional services are showing no evidence of slowing down demand."
In a statement, Courtauld flagged a 76% customer retention rate and said its "prime located 1 million-square-foot development and refurbishment programme is already attracting significant interest from prospective customers with more than £10 million under offer at a 30% premium to ERV and will generate further valuation surpluses of up to £520 million".
While the group has been focused more on sales recently, Courtauld said in the statement it will continue adding to its pipeline through acquisition, and "profitably exiting completed business plans, all the while maintaining high liquidity and low leverage".
"We expect our growth strategy to generate attractive shareholder returns with a prospective 10%-plus annualised return on equity and three-fold increase in [European Public Real Estate Association earnings per share] over the medium term.”
The period saw 43 new leases agreed and renewals generating annual rent of £37.6 million a year. That was 7.1% above March 2025 estimated rental value. Rent roll is up 29% over the last 12 months with organic growth potential of 142%, GPE said. There are a further £10.3 million of lettings under offer, 30.9% above March 2025 ERV. GPE posted like-for-like rental income growth of 5% compared to the same period last year.
The listed real estate investment trust reiterated its rental growth guidance of 4% to 7% for full year 2026, has been reiterated with prime offices stronger still at 6% to 10%.
The period saw two disposals for £292 million, 1.7% ahead of March 25 book value including 1 Newman Street, W1 sold in October for £250 million and a 4.48% net initial yield. GPE said it had £150 million to £200 million of near-term sales under consideration.
Earlier this month it formally put up for sale the Wells & More building on Mortimer Street in Fitzrovia JLL has been appointed to seek in excess of £180 million for the 116,000-square-foot building. It is leased to a mix of medical and office tenants at an average rent of £91 per square foot. In December, Heineken UK committed to a 10-year lease over 17,000 square feet.
In May, GPE said in full-year results that it was rotating towards sales as the investment market strengthened, with £350 million of disposals planned in the next 12 months. It said 50% of them were already under offer, and £650 million would be sold over the medium term.
There was one acquisition, The Gable, WC1, for £18 million adding to its West End cluster, at £409 capital value per square foot.
Planning has been secured for three major schemes at St Thomas Yard, SE1, 7/15 Gresse Street, W1, and Whittington House, WC1, comprising 351,700 square feet.
It has another four pipeline HQ schemes, with starts imminent at a total capex of £392 million.
The property valuation is up 1.5% with EPRA net tangible assets per share of 504 pence and EPRA EPS up 69.6%. The portfolio valuation is £3.1 billion. Rental values were up by 2.6%.
GPE posted International Financial Reporting Standards profit after tax of £58.9 million with the interim dividend maintained at £11.7 million (2.9 pence per share).