The boss of one of London’s largest landowners has admitted that the offices were probably never as busy as they were before the epidemic.
Businesses have changed the way they operate, GPE chief executive Toby Cortauld admits, although he is adamant that those who predicted “office deaths” have been proven to be “common wrong.”
GPE, which owns a multibillion-pound portfolio consisting mainly of offices in the capital, has returned to profitability in its most recent fiscal year after a record lease year.
It turned a profit of 7 167.2 million a year at the end of March, compared to a loss of .9 201.9 million in the previous 12 months. The recovery was driven by a rise in the value of its asset portfolio, which grew 6.1 percent year-over-year to 2.65 billion.
GPE’s net asset value rose 7.2 percent to 835p, although its shares continued to trade at a steep discount. Yesterday the stock fell 34p, or 5 percent, to 640p.
Formerly known as the Great Portland Estate, it became a cited company in 1959 after the acquisition of the properties of Basil, the cousin of Lord Samuel, the founder of Land Securities, and Howard Samuel. About 80 per cent of GPE’s assets are in the central London office building, including Mayfair’s 18 Hanover Square, the home of KKR, a private equity firm whose owner owns a 5.4 per cent stake.
From year to March, the group agreed to a record £ 38.5 million in new leasing agreements, with tenants paying an average of about 10 percent more than Basra expected at this time last year. Corthold, 54, says London’s “magnetism” is still very clear.
“Business is coming out of Covid and growing again and I think they accept the value of a place like London,” he said. “It’s a melting pot of talent, it’s fun and that’s where the kids want to be.”
Occupancy in GPE’s office buildings is increasing, although it is still below what Covid was before, and Courtold is “not sure we’ll get back there.”
He said there had been a “really interesting change” in how occupiers used their offices, including a showroom, to attract new workers.
All the big landlords have reported in recent months that businesses now want “prime” office space. The GPE says rents for those top-class spaces could rise.