Ongoing uncertainty and anaemic economic growth weighed on returns for Great Portland Estates (GPOR), with the London office landlord reporting a portfolio valuation increase of just 0.2 per cent for the year after a decline of 0.4 per cent during the second half. That was compounded by a 6.4 per cent reduction in valuations for short-leasehold properties – which account for a fifth of the portfolio – as investor demand for these types of assets declined. That also contributed to a total property return of 3.5 per cent, underperforming the 4.5 per cent reported by the Central London MSCI benchmark.
Great Portland was a net seller of investments for the sixth consecutive year, which weighed on adjusted net asset value (NAV) growth of 8p, or 1 per cent. A share buyback flattered, effectively adding 5p to that uplift. Management disposed of £349m in assets, at a 0.7 per cent discount to March 2018 estimated rental values. However, the rent roll increased 6.2 per cent, with potential to increase to £152m, after 78 new lettings were agreed 6.9 per cent above March 2018 estimated rental values.
Analysts at Berenberg expect adjusted NAV of 767p a share at the March 2020 year-end, down on 845p a year earlier.
GREAT PORTLAND ESTATES (GPOR) | ||||
ORD PRICE: | 731.6p | MARKET VALUE: | £ 1.98bn | |
TOUCH: | 731.2-731.6p | 12-MONTH HIGH: | 778p | LOW: 649p |
DIVIDEND YIELD: | 1.7% | TRADING PROP: | £5.6m | |
DISCOUNT TO NAV: | 14% | |||
INVESTMENT PROP: | £2.54bn* | NET DEBT: | 7% |
Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2015 | 695 | 507 | 148 | 9.0 |
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 |
% change | +1 | -27 | -17 | +8 |
Ex-div: | 30 May | |||
Payment: | 8 Jul | |||
*Includes joint ventures **Excludes special dividend of 32.15p a share |