Great Portland Estates is playing "both sides of the investment coin" for the first time in more than a decade as its record leasing encourages it to buy for redevelopment and pursue up to £1 billion of sales at the same time.
Details of those potential sales and acquisitions, including the possible disposal of three of London's most prime offices and retail buildings, were provided in the developer and investor's results for the full year ending 31 March 2026.
Chief executive Toby Courtauld flagged how the business had delivered the core components of its "contra-cyclical strategy" to beat prior expectations. He listed record levels of leasing significantly ahead of rental values, opportunistic acquisitions at a discount, £500 million of asset sales at a premium and the completion of "some of the highest quality spaces in our capital city, into a severely undersupplied market". That led to earnings per share lifting 63% and net assets growing by 6.1%, with development values up 22%.
Speaking to CoStar News, Courtauld said: "In short it was a very strong year. Operationally we are really pleased. There was a record number of leases done handsomely ahead of ERV. And the final quarter was our strongest of them all in terms of beats to ERV, and there is a load more to come. We also delivered on the range for rental growth we had estimated – at somewhere between 4 and 7%, and we have reiterated for the coming year a similar range. That has translated into a 63.5% increase in earnings per share and net tangible assets up 6.15%. It was a good strong performance across the spectrum."
In terms of the investment strategy, Courtauld said there had £490 million of completed sales to rotate into a "better use of capital".
"We are selling at a 2% premium to book value which plays to the bifurcation in the market. We are selling the best and have been buying often knackered buildings in great locations at a discount of about 70% to replacement costs."
Courtauld described this as the first time since 2013 the group had been "playing both sides of the coin", given the marked disparity between rents being achieved for secondary offices and those for prime, and the ability the company has to take buildings from one to the other.
In terms of the market and how sentiment has been hit in London by the war in Iran and macroeconomic concerns, Courtauld said: "There is an enormous difference between the leasing market which is very strong - especially in core locations – and the investment market. In leasing I don't think there is any real evidence of a customer pull back. The active demand is at all time highs – 30% higher than this time last year. There may be a few more deals that fall out of bed but the supplyside drought is such that that is good protection.
"The investment market is a difficult kettle of fish. It is by no means at the heights it was pre-Brexit though figures are a lot higher than last year. There has been an 120% increase in £100 million-plus trades, too, over the last year, so there are more trading, but we are not back to the races. Investment is, in part, sentiment- and interest rate-driven and on those two measures it is not an easy one. But there is a clear bifurcation between the best and the rest. What is doing well is things that have something about them; that are interesting. If you are in a periphery location and it is a commoditised asset it will do less well.
"We have managed to buy via two deals with good numbers coming off them. We have bought away from the market because of relationships where we can get access to raw material and we can provide vendors with speed of transaction and certainty."
In terms of its proposed sales Courtauld said there were around £200 million proceeding in the near term, while it is considering around £1 billion in the medium term.
Courtauld confirmed three London trophy offices where GPE has completed the business plan would likely form part of this £1 billion.
They are: Hanover Square, where GPE has just completed rent reviews that have lifted rents by 50%, 2 Aldermanbury Square which it has completed for Clifford Chance to occupy in its entirety, and 30 Duke Street which completes in the autumn.
Jayne Cottam, the group's new chief finance officer, said loan to value is bang in the middle of its 10% to 35% range.
"The liquidity of £400 million means we can still manage the capex for our pipeline and have LTV still at 32% without sales. We are in a really strong position with ample liquidity to take advantage of opportunities."
Courtauld added: "Pleasingly the earnings number and NTA were ahead of consensus and running quicker than the market assumed we would be able to. We are back to delivering a circa 10% return on equity handsomely ahead of the cost of capital. All else being equal, we are well on track to deliver on our aspirations."
The figures for the record leasing year were 88 new leases and renewals generating annual rent of £70.9 million per annum at 10.3% above March 2025 estimated rental value
The rent roll was up 46% with further organic growth potential of 95%, GPE said. It estimated full year rental growth guidance of 4% to 7%, with prime offices 4% to 8%
The portfolio valuation is £3 billion, up 4.3%, split to plus 5.4% for offices and plus 22.2% for developments. Rental values were up by 5.8%, with 6.3% for offices, rising to 7.2% for prime and 1.6% for retail.
GPE posted an International Financial Reporting Standards profit after tax of £154.5 million. The total dividend increased to 8.2p per share.
The period was one of capital recycling with £490 million of sales, ahead of book value. There were four disposals, 2.3% ahead of March 2025 book value, representing £1,251 per square foot capital value.
There were two accretive acquisitions at £69 million, adding to its Fitzrovia cluster, at £592 capital value per square foot.
GPE flagged progress across its development and refurbishment programme. That includes 2 Aldermanbury Square, EC2, completed, on time and budget.
It is making good progress at five on-site development and refurbishment schemes with £223 million capex to come.
There were three Fully Managed deliveries in the year (circa 77,000 square feet) with strong leasing progress. There are a further three pipeline headquarter schemes, with planning secured at St Thomas Yard, SE1 and a total capex of £367 million.
In terms of the balance sheet GPE said there was liquidity and optionality with a new £525 million revolving cash facility agreed and the loan to value at 28.6%.