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RNS Number : 7341O
Great Portland Estates PLC
05 October 2023
5 October 2023
GPE Business Update
Great Portland Estates plc (GPE) publishes a business update for
the six months to 30 September 2023.
Strong leasing 13.4% ahead of ERV
-- 37 new leases and renewals (including nine Fully Managed
deals) signed in the first half generating annual rent of GBP11.2
million (our share: GBP10.5 million), with market lettings on
average 13.4% ahead of March 2023 ERV
Progressing development pipeline in supply constrained prime
central London market
-- Commitment to major office-led redevelopment at Jermyn Street
Piccadilly, W1 to provide 66,600 sq ft (up
from 54,700 sq ft) of new Grade A space
-- Planning permission obtained for the redevelopment of Minerva
House, SE1 and work underway to prepare the site for a potential
start early next year
-- Reviewing the Planning Inspector's report and Secretary of
State's planning refusal at New City Court, SE1
Acquisition of HQ development opportunity in Soho Square, W1
-- Acquisition of freehold interests at 16/19 Soho Square, 29/43
Oxford Street and 7 Falconberg Mews, W1 for GBP70 million (GBP772
per sq ft on consented NIA)
New GBP250 million unsecured Term Loan
-- New GBP250 million unsecured Term Loan, with cash and undrawn
facilities now in excess of GBP470 million
Toby Courtauld, Chief Executive, said:
"We are seeing healthy demand across our range of high quality,
well-located spaces, signing up customers at rents comfortably
ahead of March 2023 rental values. We are making good progress
across our development and refurbishment programme, committing to
our Jermyn Street scheme and adding to the pipeline with our
acquisition in Soho Square.
Looking ahead, current market conditions will likely further
constrain supply in a market where high quality space is extremely
scarce. As customers compete to secure the next home for their
business, we fully expect the gap between the best spaces and the
rest to widen. Our clear focus on meeting this demand with our
prime sustainable spaces and our market-leading levels of customer
service, in core central London locations, means we are well
placed. In addition, with our recent debt financing further
enhancing our significant financial firepower, we will continue to
take advantage of market opportunities which we expect to
unearth."
Strong leasing performance 13.4% ahead of ERV
-- 37 new leases and renewals signed in the first half
generating annual rent of GBP11.2 million (our share: GBP10.5
million), with market lettings on average 13.4% ahead of March 2023
ERV, including:
o nine Fully Managed leases signed at an average GBP220 per sq
ft, 13.6% ahead of March 2023 ERV; and
o 18 new retail leases securing GBP4.1 million of rent with
market lettings 18.1% above March 2023 ERV.
-- a further GBP6.2 million of rent is currently under offer;
market lettings 4.4% ahead of March 2023 ERV.
During a period of strong retail lettings, at Walmar House, W1
we signed a new 10-year lease with VF Corp, which trades as The
North Face, to extend their flagship store by 9,700 sq ft into an
adjacent unit, increasing its footprint by 33%.
Further south on Regent St, at Kingsland House, W1 we signed a
new 10-year lease with British contemporary designer fashion brand,
JOSEPH. This completes the repositioning of the retail offering at
Kingsland and Carrington House, following TUMI, Russell &
Bromley, Pret A Manger and The Body Shop who completed new leases
with GPE last year.
Commitment to the redevelopment of Jermyn Street Piccadilly,
SW1
Following the agreement of a new headlease at Jerymn Street
Piccadilly (formerly French Railways House) in July 2023, we have
now committed to the redevelopment of the site. Our major
office-led redevelopment will provide 66,600 sq ft (up from 54,700
sq ft) of new Grade A space. The scheme is expected to complete in
mid-2026 and will embrace the principles of the circular economy.
We will retain the existing foundations and basement, typically the
largest embodied carbon element of a building, and construct a
lightweight building above to allow the retention of the
substructure. We will also reuse the structural steel from the
demolition of 2 Aldermanbury Square, EC2, in its construction. This
will almost eliminate the embodied carbon in the steelwork and
allow for the delivery of 9,500 sq ft best in class, column-free
floorplates.
Good progress ahead of potential start at Minerva House, SE1
During the period, Southwark Council resolved to grant planning
permission for the redevelopment of Minerva House, SE1 and good
progress has been made to prepare the site for a potential start
early next year. Our plans will take the overall commercial space
to 140,300 sq ft, an increase of approximately 53% on the existing
area. The public realm between Minerva House and Southwark
Cathedral will be significantly enhanced and a new cut-through
across the site for the publicly accessible Thames Path will be
opened up.
Two planning applications at New City Court, SE1 refused
We submitted two planning applications to Southwark Council to
redevelop New City Court, SE1 on the Southbank, the first in
December 2018 for a 372,500 sq ft scheme, and a second in April
2021 for a 389,100 sq ft scheme.
In January 2022, having explored all avenues to have both
schemes approved without success, we regretfully appealed for
non-determination. This triggered a planning inquiry that closed in
August 2022. In September 2023, we received confirmation that the
Planning Inspector's report recommended the planning applications
were refused and the Secretary of State agreed with its
conclusions. We are carefully reviewing the Planning Inspector's
report and Secretary of State's decision and will provide a further
update in due course. New City Court currently has a rent roll of
GBP2.9 million.
Adding to the pipeline with the acquisition of the Soho Square
Estate, W1
Building on our successful track record at the eastern end of
Oxford Street, in August 2023, we acquired the freehold interests
at 16/19 Soho Square, 29/43 Oxford Street and 7 Falconberg Mews, W1
for GBP70 million (GBP772 per sq ft on consented NIA). The 57,456
sq ft mixed-use buildings are currently multi-let at c.GBP1.48m
p.a. with vacant possession expected by March 2024. The 0.5 acre
site benefits from planning consent to demolish the existing
buildings and deliver around 90,000 sq ft of new Grade A office and
prime retail space. The redevelopment will provide a best-in-class
HQ office building on Soho Square with flagship retail fronting
Oxford Street, arranged over basement, lower ground, ground and
eight upper floors, with multiple private terraces and a communal
roof terrace.
New GBP250 million Term Loan signed
In early October 2023, we signed a new GBP250 million unsecured
Term Loan at a headline margin of 175 basis points over SONIA with
three existing relationship banks. The loan has an initial
three-year term which may be extended to a maximum of five years at
GPE's request, subject to bank consent. Our current total liquidity
of more than GBP470 million will support the delivery of our
strategic priorities, including funding the Group's near-term
development programme and GBP175 million private placement debt
maturing in May 2024.
Half year results
GPE will announce its half year results on 16 November 2023,
with the results presentation available on our website at
8.30am.
Great Portland Estates plc +44 (0) 20 7647 3000
Toby Courtauld, Chief Executive
Nick Sanderson, Chief Financial & Operating
Officer
Stephen Burrows, Director of Investor
Relations and Joint Director of Finance
FGS Global +44 (0) 20 7251 3801
James Murgatroyd
Gordon Simpson
For further information see www.gpe.co.uk or follow us on
Twitter at @GPE_plc
LEI Number: 213800JMEDD2Q4N1MC42
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