Great Portland sees portfolio value plunge 12.4%

Great Portland Estates, the Central London office and retail specialist, said on Thursday that the value of its property portfolio has dropped by 12.4% since September 2008, highlighting the rapid pace of the slide of values in the UK real estate sector.

The valuation of the group's properties at end-December 2008 was £1.2 bn (EUR 1.27 bn), a fall of £175.5 mln (EUR 185.7 mln) since the end of September.

London-listed Great Portland said the net asset value (NAV) per share of 392 pence sterling was down 20.5% since September last year, and down 30.5% since December 2007. The firm reported rental value declines of 9.4%, 13.8% in West End offices and 2.1% in West End Retail. Vacancy rates increased to 7.5%, from 3.2% in September 2008.

CEO Toby Courtauld said: 'As we warned at our half-year results in November, deepening problems in the credit markets and heightened fears of a prolonged recession have served to push up investment yields and dampen occupational demand for office and retail space in central London. As a result, the rate of decline in property valuations accelerated across all UK sectors during the last quarter of 2008.'

On a more positive note, Great Portland stressed that the rates of decline in the valuation of its office and retail holdings 'compare favourably' to the fourth quarter capital reductions in the IPD monthly West End office, City office and London retail sub sectors of 16.1%, 16.9% and 12.4% respectively. 'Our portfolio continues to outperform the relevant indices, due in part to its defensively low average rent concentrated in the core of the West End, and the continued good letting progress made during the quarter,' Courtauld said.

Great Portland's share price finished -2.34% down at 227.25 pence on Thursday.