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 significant discounts, adding to the development and flex pipeline amid a supply-constrained London office market.

• Completed £350 million rights issue to capitalize on London real estate opportunities, with £1.0 billion more under review.

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

• Flex office offering expanded, now over halfway to the 1 million sq ft ambition.

Financial highlights

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

• Rent roll increased by 2.1% to £110 million; EPRA earnings were £8.5 million, down 28% year-over-year.

• Interim dividend declared at £11.9 million; EPRA NTA per share up 0.4% to 475p; net assets increased to £1,928.6 million.

• EPRA LTV at 23.3%; liquidity increased to £670 million.

• IFRS profit after tax of £29.7 million for the six months ended 30 September 2024.

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 but lower EPS due to increased share count; earnings growth anticipated post-2025 as developments complete.

• Dividend payout for FY25 to be no less than FY24 (£31.9 million), with progressive policy maintained.

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

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