Great Portland Estates’ LON:GPE leasing engine keeps humming. The central London landlord’s second-quarter update shows momentum accelerating, defying a jittery macro backdrop and a still-patchy investment market.
In the three months to 30 September, GPE signed 26 new leases and renewals worth £17 million of annual rent, taking the first-half tally to £37.6 million, equal to the *entire* leasing volume of the prior year. That performance was 7.1 per cent ahead of valuers’ estimated rental values (ERVs), up from 6.7 per cent in Q1.
Chief executive Toby Courtauld might be forgiven a little self-congratulation. A shortage of high-quality office stock in central London has tilted bargaining power back toward landlords able to deliver premium, sustainable space. Roughly 40 per cent of GPE’s portfolio is under transformation, with the group banking on rising occupational demand to sustain growth. It still expects portfolio-wide rental growth of 4-7 per cent this year, and 6-10 per cent for prime offices.
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The mix of leasing is instructive. Fully Managed offices — GPE’s flexible, amenity-rich product — are now the star attraction. Twenty-five such deals were signed in the half, generating £19.1 million of rent at an average £238 per sq ft, 6.7 per cent ahead of ERV. “Ready to Fit” leases, appealing to tenants seeking customisable space, brought in another £14.2 million, 8 per cent above ERV, including a pre-let to CD&R at 30 Duke Street. Retail, long the laggard, added £3.3 million, a modest 1.3 per cent beat.
Technology and AI tenants are becoming important
Technology and AI tenants are becoming a distinctive part of the story — now 18.5 per cent of the Fully Managed portfolio. The September letting of 7,500 sq ft at Kent House, W1, to compliance-automation platform Vanta illustrates the trend. That deal swiftly replaced outgoing tenant Synthesia, with only a four-week gap. In a market where many landlords face rising voids, GPE’s quick re-lets underline the resilience of its curated offer.
The company is also reaping early rewards from its latest refurbishments. At 141 Wardour Street (a painstakingly restored Art Deco block in Soho) two-thirds of the 29,900 sq ft workspace is already let, yielding £4.4 million of rent at an eye-watering £279 per sq ft.
Over in Piccadilly, the Grade II-listed 170 Piccadilly reopened in September with 25,600 sq ft of Fully Managed offices. One floor has been pre-let, and GPE is targeting £300 per sq ft for the best space, proof that, at the top end of the market, tenants will still pay for polish.
Growth by acquisition continues. In September, GPE bought The Gable, WC1, from the City of London Corporation for £18 million — about £409 per sq ft on current space — adding another piece to its Fully Managed cluster around Tottenham Court Road. Together with nearby holdings, the group is assembling some 220,000 sq ft of Grade A space in Fitzrovia. Planning consent has also been secured for a 43,000 sq ft refurbishment at Gresse Street and Rathbone Place.
Great Portland’s financial foundations are solid
Financially, the group’s foundations remain solid. Moody’s reaffirmed its Baa2 rating with a stable outlook in September, noting the balance-sheet strength and disciplined capital management. Meanwhile, an independent whistleblower investigation — conducted over the summer — concluded without findings of unlawful conduct, and with endorsement of GPE’s corporate culture.
In short: GPE is doing the basics very well. The London leasing market may be narrow, but in that narrow band of high-spec, high-service space, demand is deep. For now, GPE looks comfortably on the right side of scarcity.
