Great Portland sees its office valuations jump
GREAT Portland Estates yesterday signalled a tentative return to health for the commercial real estate sector as it revealed a jump in valuations over the past quarter and announced a lucrative new West End property deal.
Great Portland, which in May tapped investors for £560m in a rights issue, said its properties were valued at £1.05bn at the end of September, after rising 2.6 per cent in the previous three months.
Chief executive Toby Courtauld said the group has signed up to new investments and capital commitments worth £140m after the rights issue, with a further £48m in the pipeline.
“Although rental prospects in the office market remain subdued in the short term, we are seeing signs of life in occupational demand,” he said.
Great Portland also announced the acquisition of two West End developments, as part of a deal with real estate bank Eurohypo. Under the profit-sharing and debt structuring agreement, Great Portland will buy the sites from current owner, Dubai sovereign wealth fund Istithmar World, for £10m plus a share of future profits.
Cazenove analyst Miranda Cockburn said the deal showed an “ability to make interesting acquisitions in a supply-constrained market”.