July 21 (Bloomberg) -- Great Portland Estates Plc, the property developer focused on office space in London’s West End, said its real estate appreciated by 3.8 percent the fiscal first quarter on demand from international investors.
The value of Great Portland’s properties rose by 58.4 million pounds ($94 million) to 1.7 billion pounds in the three months through June, the London-based company said in a statement today. Net asset value increased to 376 pence a share from 362 pence at the end of March.
A weak pound, higher rents from a shortage of new office space and the perception of London as a haven attracted investors from overseas. Central London offices accounted for 46 percent of the 6.45 billion pounds of U.K. commercial real estate deals in the second quarter, according to Stafford, England-based Property Data.
“Investor demand for central London commercial property continued unabated during the quarter and with limited supply, we expect much of it to remain unsatiated for some time to come,” Chief Executive Officer Toby Courtauld said in the statement.
Great Portland was little changed in London trading at 438.4 pence as of 8:03 a.m. The shares have risen almost 22 percent this year, exceeding the 12 percent gain for the FTSE All-Share Real Estate Investment Trust Index in the same period.
The company disposed of four properties for 111 million pounds since the end of March. Two of the sales, agreed to earlier this month, came through the company’s joint venture with Capital & Counties Properties Plc. The buildings on Kensington High Street and Kingsway, fetched 79.1 million pounds.
The asset sales lowered the company’s net debt to 28.7 percent of the value of Great Portland’s properties, from 31.4 percent three months earlier.
Great Portland will use proceeds from disposals and credit lines to fund five development projects in progress and 11 that have yet to be started.
The company’s vacancy rate rose to 3 percent from 2.7 percent at the end of March. Tenants signed 15 new leases, generating an additional 6.3 million pounds in additional annual rental income, the company said.
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