Great Portland secures 77% of December quarter rents

14 January 2021

(Sharecast News) - Great Portland Estates said on Thursday it had collected the majority of December quarter rent, but warned that the short-term trajectory of the Covid-19 pandemic remained "unpredictable".

The commercial landlord, which focuses exclusively on London, said 77% of rents due in the three months to 31 December had been collected to date, including amounts covered by rent deposits. Stripping that out, the figure was 69%.

The stronger sector was office units, where 84% of rents were collected; just 35% was collected from the retail, hospitality and leisure sectors.

Chief executive Toby Courtauld said: "The surge of optimism following the UK approval and roll-out of the Covid-19 vaccines has been overshadowed by the return to more stringent lockdown measures across London.

"While rental collection rates for the December quarter are ahead of September levels, building utilisation rates have greatly reduced once more and some sectors remain challenged.

"As expected a number of our occupiers have been unable to meet their rental obligations.

"We expect the near-term trajectory of the pandemic to remain unpredictable, but as the vaccination programme progresses, we anticipate that confidence will return."

A total of £2.4m of new annual rent was signed during the quarter, while market lettings were in line with March 2020 estimated rental value, including £1.1m or 17,700 sq ft to Four Communications at The Hickman, E1.

Its development programme saw work start on the office refurbishment at 50 Finsbury Square, EC2, and "good progress" made at 1 Newman Street and 70/88 Oxford Street.

GPE also continued to collect rent from earlier in the year during the quarter, and September, June and March collection rates are now at 85%.

Tom Musson, analyst at <em>Liberum</em>, said: "The company's financial position remains strong, with a loan-to-value of 18.2% and cash and undrawn facilities of &#163;441m. The shares trade on 19% discount to spot EPRA net tangible assets Vs a sector average of a 5% premium. The shares offer a dividend yield of 2.0x."

<em>Liberum</em> has a 'hold' recommendation on GPE, and a target price of 710p.

As at a 0930 GMT, shares in the FTSE 250 firm were ahead 1% at 644.4p.