Great Portland Estates plc (LON:GPE) has published its trading update for the quarter to 30 June 2020.
Toby Courtauld, Chief Executive, said:
“Whilst the lockdown has started to ease and our office pre-letting momentum remains healthy, COVID-19 is disrupting the activities of many of our existing occupiers, which in some instances is impacting their ability to meet their rental payments. We continue to actively engage with all our stakeholders, in particular offering assistance to our occupiers, on a case by case basis to support them through this unprecedented time, and helping the communities in which we work through the deployment of our new community fund.
Despite these challenging conditions, we are well positioned. Our leverage is low providing strength in these difficult markets with significant capacity for growth should opportunities emerge; our portfolio is almost fully let and our extensive development pipeline is set to deliver high quality, sustainable spaces that remain in high demand; this, combined with the talents of our experienced team and strong culture, means that we have the ability to choose our path to deliver on all our ambitions.”
Extensive engagement with our occupiers, providing support on a case by case basis
· 69% of June rent collected to date including amounts covered by rent deposits; 58% excluding deposits (74% from offices; 28% from retail/hospitality/leisure sectors)
· 82% of March rent now collected including drawn deposits; 70% excluding deposits
· £21.6 million of rent deposits/bank guarantees, of which £2.5 million anticipated to be utilised against outstanding June rent
· All offices open and operating with COVID-19 Secure status
· Bespoke Return to the Workplace playbook issued to all occupiers
· Great Portland Estates Community Fund raised more than £310,000 to support some of London’s most vulnerable
Operating well; strong leasing
· £4.3 million of new rent signed in quarter. Market lettings 4.4% ahead of March 2020 ERV, including 39,970 sq ft to Exane at 1 Newman Street on 15 year term (no break) at £100 per sq ft with 33 months rent free
· 11 lettings under offer for £12.1 million (our share: £7.0 million), 4.3% ahead of March 2020 ERV including one office pre-let
· Sustainability statement of intent (The Time is Now) launched
· National Equality Standard accreditation achieved
Good progress across our development programme during lockdown; covers 56%1 of existing portfolio
· Committed: three projects covering 414,600 sq ft
o 42% pre-let or under offer; 14.7% forecast profit on cost
o All sites open with £47.5 million capital expenditure to come and two completing in next four months, third in Q3 2021
· Near-term: three schemes (821,600 sq ft); strong occupier interest ahead of earliest starts in 2021
· Total pipeline: ten schemes (1.4 million sq ft), all income producing, 2.6 years WAULT, 9.5% reversionary2
Strong financial position; total liquidity of £390 million
· Property LTV1 of 15.0%, weighted average interest rate of 2.2%
· Substantial headroom above Group debt covenants (values could fall 68% before breach)
· Cash of £90 million; undrawn facilities of £300 million
1. Based on property values at 31 March 2020
2. Existing use of development pipeline at 30 June 2020
