May 22 (Bloomberg) -- Great Portland Estates Plc, the real estate developer focused on London’s West End, said full-year profit rose 16 percent as the value of its properties increased.
Net income for the year through March climbed to 180.6 million pounds ($273 million), or 55.7 pence a share, from 155.2 million pounds, or 50.2 pence, a year earlier, the London-based company said today in a statement. That beat 153.2 million pounds, the average of nine estimates in a Bloomberg survey.
“Conditions in our central London markets remain supportive,” Chief Executive Officer Toby Courtauld said in the statement. “Given the continued scarcity of finance for speculative development, we can look forward to healthy rates of rental growth in selected London sub-markets.”
Net asset value rose 10.7 percent to 1.5 billion pounds as demand increased for office space in central London. The company earlier this week said it agreed to rent all of its 142,500 square-foot (13,200 square-meter) Fetter Lane office development in advance to law firm Bird & Bird.
The value of Great Portland’s sites is being boosted by a lack of competing projects as finance for new building remains scarce. U.K. landlords with access to finance including Land Securities Group Plc and British Land Co. have bet heavily on development to gain from growing demand while the supply of buildings continues to decline.
Great Portland was little changed in London trading at 597 pence as of 8:22 a.m. The stock has climbed 22 percent this year, giving the company a market value of 2.05 billion pounds.
While investors have increased the amount of money earmarked for London property since November, assets for sale have fallen to 800 million pounds from 2.6 billion pounds, Courtauld said in an interview. The competition for scarce assets is going to put pressure on yields, he said.
Net rental income increased 23 percent to 57.1 million pounds. The company will pay a full-year dividend of 8.6 pence a share, up from 8.4 pence a year earlier.
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