Great Portland Estates Plc, the real estate developer focused on London’s West End, said first-half earnings climbed 92 percent as a shortage of space in the district led to higher office rents.
Pretax profit excluding changes in asset values rose to 146.9 million pounds ($236 million), from 76.7 million pounds a year earlier, the London-based company said in a statement today. Net rental income climbed to 34.9 million pounds from 26.5 million pounds.
“London’s businesses are, once more, investing for growth and our limited available space to let is attracting significant interest, enabling us to lease at” higher rates, Chief Executive Officer Toby Courtauld said in the statement. “Central London’s appeal as an investment destination of choice continues unabated.”
Great Portland and competitors British Land Co. and Land Securities Plc are building large projects in London close to transport links to satisfy growing demand as Britain’s economy improves. U.K. commercial real estate values rose for a fifth straight month in September, according to Investment Property Databank Ltd. Britain’s economy will expand 1.4 percent this year and 2.2 percent in 2014, outpacing Germany and France, the largest economies in the euro region, according to analysts surveyed by Bloomberg.
The average rent in Great Portland’s offices was 41.80 pounds a square foot, compared with 38.10 pounds six months earlier. Adjusted net asset value rose 9.2 percent from the end of March to 487 pence a share, according to the statement.