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Great Portland Estates, the London-focused property group, underlined the resilience of the capital’s property market after reporting its best-ever rent collection figures.
The company, which owns £2.1bn-worth of offices and shops across the West End, said it had received 99 per cent of the rent due for the three months to June 30 within seven days of the quarter ending.
“London very plainly has not suffered from a double-dip recession and our customer base is telling us that,” said Toby Courtauld, GPE chief executive.
Mr Courtauld added that it was unclear how much further the dislocation between London’s economy and that of the rest of the UK could go.
“We haven’t really been here before, so it is very hard to know the extent to which London can become de-linked to the economic situation in the rest of the country. But politicians have to see that London is the extraordinary engine in the UK and be careful not to redistribute the wealth too much,” he said.
In the three months, the value of the GPE’s portfolio increased 3.1 per cent to £2.107bn, taking the net asset value per share to 417p. The increase compares to 0.4 per cent for the central London office market as a whole over the quarter, according the CBRE monthly index.
The company, one of the most active in the central London property market, bought £159m of buildings and sold £140.5m during the period. Net debt at the end of June was £584.7m, up from £499.1m three months earlier. The increase took GPE’s gearing to 45.5 per cent – a level Mr Courtauld said he was “comfortable with”.
Demand for buildings in the West End has soared during the past few years, as companies in the creative industries rush to take up office space in London. The growth is in contrast to the City of London, where the shrinking financial services sector has constrained rental growth.
Since the middle of 2009 – the nadir of the commercial property market – rents in Covent Garden have risen from £45 per sq to £65, while the City has gone from £42.50 per sq to £55 today, according to data from Knight Frank, the property services group.
“These guys are a class act and are raising the bar in terms of buying the right assets in the right locations and doing the right things with them,” said Osmaan Malik, an analyst at JPMorgan.
Shares in the company, which have risen 30 per cent since the start of the year, fell 2.21p to 420p on Tuesday.