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Third major developer posts big loss following property revaluation

76 Oxford House by Orms - an overhaul of a 1950s modernist office block backed by Great Portland Estates (approved in July 2016)
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Great Portland Estates (GPE) has posted a pre-tax loss of £62.8 million after its portfolio valuation fell by 3.7 per cent

GPE is the third major developer to post a half-year loss this week, following similar revelations by British Land and Land Securities. Property revaluations saw British Land report a pre-tax loss of £205 million, while Land Securities also posted a loss of £95 million.

According to the AJ’s sister title Construction News, the value of GPE’s property portfolio dropped to £3.75 billion, having fallen by 3.7 per cent in the past six months.

The developer reported the devaluation in its half-year results for the six months to 30 September 2016. However, the firm maintained a strong cash position, with undrawn facilities of £553 million.

GPE also reported that 72 per cent of its committed developments were pre-let or pre-sold, and that it had completed two projects since the summer, one an office and retail scheme at 30 Broadwick Street designed by Emrys Architects which finished in September and was 25 per cent pre-let.

The developer also reported that its £34 million 73/89 Oxford Street scheme, a 8,400m² commercial new-build designed by Lifschutz Davidson Sandilands is 91 per cent pre-let, with office space being taken up by Moneysupermarket Group.

Other jobs under way include a commercial development at Hanover Square in the West End also by Lifschutz Davidson Sandilands (pictured below) – a 30,511m² over-site building at Bond Street Crossrail worth more than £100 million.

Lifschutz Davidson Sandilands Bond Street Crossrail station over-site development in Hanover Square London

Great Portland Estates half-year results reveal £63m loss following property revaluation

Great Portland Estates has 14 projects in its next development cycle, together making up 1.4m sq ft (130,000m²).

GPE chief executive Toby Cortauld said the firm’s committed development pipeline was ‘largely de-risked’, allowing the firm to grow in spite of the current economic uncertainty.

’Our balance sheet has never been stronger and gearing never lower, giving us significant financial capacity to exploit any market weakness, just as we did in 2009,’ he said. ’And we have a first-class team ready to capitalise on this period of uncertainty.

 

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Readers' comments (1)

  • If the image of the Hanover Square development is anything to go by, Great Portland Estates might be in the business of creating commodity and firmness - but there appears to be a depressing absence of delight, and that surely can't be doing their bottom line much good.

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