Great Portland Property Values Rise on Scarce Developments

Great Portland Estates Plc (GPOR), the developer focused on London’s West End, said the value of its real estate rose 1.4 percent excluding acquisitions and disposals in the third quarter as demand increased for retail assets and the company added developments.

The value climbed to 2.19 billion pounds ($3.46 billion) at the end of last year, a gain of 26.5 million pounds from Sept. 30, the London-based company said today in a statement. Net asset value rose 1.4 percent to 430 pence a share.

Overseas buyers including Asian pension funds are driving increased demand for assets in London, supporting prices, broker Jones Lang LaSalle Inc. (JLL) said last month. The value of Great Portland’s development sites is being boosted by a lack of competing projects as finance for new building remains scarce in the U.K., the company said.

“Conditions in London’s commercial property markets remain supportive,” Chief Executive Officer Toby Courtauld said in the statement. “The demand for well laid out retail and office space in good locations is attracting healthy levels of tenant demand.”

Great Portland shares rose 1 percent to 478 pence at 10:30 a.m. in London trading. The stock has gained 33 percent in the past 12 months, compared to a 15 percent increase on the FTSE EPRA/NAREIT Developed Europe Index. (EPRA)

The value of Great Portland’s developments increased by 2.6 percent during the quarter. They include Hanover Square, an office and retail project in the Mayfair neighborhood.

Crescent Sale

The company is in talks to sell Park Crescent West, an office and residential property jointly owned by Capital & Counties Plc. (CAPC) If a sale doesn’t take place within six months, Great Portland may consider partially converting it into homes, Courtauld said in a telephone interview.

In October, a person with knowledge of the matter said the owners will seek more than 100 million pounds for the property.

Interest in residential conversions is accelerating in London’s West End, Courtauld said. To better deal with the demand for housing, the government may have to review its conversion policies in the medium term, he said.

To contact the reporter on this story: Neil Callanan in London at ncallanan@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.