Great Portland Estates (GPE) H1 2025 earnings summary

Executive summary

• Strong operational performance with robust leasing, low vacancy, and high customer retention, positioning for long-term income and value growth.

• Three acquisitions totaling £106 million at a 61% discount to replacement cost, using about 30% of recent rights issue proceeds, with £1.0 billion more under review.

• Completed £350 million rights issue to capitalize on London real estate opportunities, supporting HQ and Flex pipeline.

• Focused on delivering best-in-class, sustainable office and flex spaces in prime London locations, with disciplined capital allocation.

• Significant development pipeline: seven on-site schemes and six near-term, with £394 million capex to come and £225 million in expected surpluses.

Financial highlights

• Portfolio valuation up 0.8% to £2.5 billion; West End assets comprise 72% of value.

• Rent roll increased 2.1% to £110 million; ERVs up, vacancy low, and customer retention high at 75%.

• EPRA earnings at £8.5 million, down 28% year-over-year; interim dividend declared at £11.9 million.

• EPRA NTA rose to 475p per share; net assets above £1.9 billion after equity raise.

• Liquidity at £670 million, up 12.8% from prior period; EPRA LTV at 23.3%.

Outlook and guidance

• Rental value growth guidance reiterated at 3%-6% for FY25, with prime offices expected to see 5%-10% growth.

• FY25 expected as an earnings inflection point, with stable EPRA earnings and EPS decline due to share count; progressive dividend policy maintained.

• Anticipates EPS progression and full DPS cover in FY26, with further growth from rental income, flex NOI, and cost discipline.

• LTV expected to rise as investments are made, but to remain within the 10%-35% target range.

• Targeting 10%+ total accounting return into the medium term, driven by development surpluses and flex growth.