Great Portland Estates (GPOR) is braced for a worsening in rent arrears later this year after collecting just 71 per cent of rent due in respect of the second quarter, with retail and leisure tenants accounting for the majority of the shortfall. “It is clear that we must plan for a recession with an increase in unemployment, leading to reduced occupational demand for space, implying falling rental and capital values,” said chief executive Toby Courtauld.
There are signs of strain elsewhere. While three committed schemes are expected to generate a profit of 14.7 per cent on cost of development, this is below the 18.9 per cent guided to in November. The proportion which is pre-let or under offer is also unchanged at 48 per cent.
The closure of most retail stores and leisure facilities has catalysed a longer-term deterioration in retail rental values, which declined 4.3 per cent on an underlying basis and offset a 3.5 per cent rise in the office portfolio. However, demand for short leasehold properties suffered the most, with the value of those assets falling by a tenth.
Peel Hunt forecasts an adjusted NAV of 826p at the March 2021 year-end, rising to 862p the same time the following year.
| GREAT PORTLAND ESTATES (GPOR) | ||||
| ORD PRICE: | 628p | MARKET VALUE: | £1.59bn | |
| TOUCH: | 627.4-628.6p | 12-MONTH HIGH: | 972p | LOW: 519p |
| DIVIDEND YIELD: | 2.0% | TRADING PROP: | Nil | |
| DISCOUNT TO NAV: | 28% | |||
| INVESTMENT PROP: | £2.63bn* | NET DEBT: | 18% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 847 | 555 | 163 | 9.2 |
| 2017 | 796 | -140 | -40.8 | 10.1 |
| 2018 | 840 | 76.7 | 21.5 | 11.3** |
| 2019 | 851 | 56.1 | 17.9 | 12.2 |
| 2020 | 868 | 51.6 | 20.0 | 12.6 |
| % change | +2 | -8 | +12 | +3 |
| Ex-div: | 28 May | |||
| Payment: | 28 Jul | |||
| *Includes investments in joint ventures **Excludes special dividend of 32.15p a share | ||||
