London Chairman Richard Peskin, said: 'Last November I mentioned that there was no guarantee that the very strong rental and capital growth which we had been experiencing for two to three years could be sustained, and signs of an economic downswing are emerging.' He said that this changed climate justified Great Portland's decision to focus on its £1 billion-plus ($1.4 billion) portfolio of central London offices.
To rationalise its portfolio, Great Portland has withdrawn from the industrial, retail parks and high street shopping sectors. Close to £600 million ($840 million) of properties, roughly one-third of the total, have been sold, with £325 million being repaid to shareholders through a return of capital and share buy-backs. And since the year end Great Portland has put its portfolio of shopping centres on the market.
The remaining central London properties were valued at over £1 billion ($1.4 billion). Peskin said that over the last three years this element of the portfolio has produced 13% compoundgrowth, with the West End, which remains Great Portland's favoured pitch, providing 15%. 'The increase in central London values was driven by strong rental growth as demand for offices outstripped the available supply and this imbalance is forecast to persist,' Peskin said.
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