Great Portland Estates will press ahead with six major development schemes in London after posting a 17 per cent profit rise.
The developer’s near-term programme consists of six schemes totalling more than half a million sq ft, all of which could start in the next two years (see box).
These include 73/89 Oxford Street, which Construction News revealed will be built by Brookfield Multiplex.
GPE’s 1.2m sq ft committed and near-term development programme is the largest the group has ever undertaken, accounting for around 25 per cent of all core West End speculative deliveries over the next four years.
But the developer warned that a shortage of contractor capacity is “reducing market access to new entrants or those developers without meaningful pipelines of work, and supporting construction cost inflation” in its core West End market.
GPE said it would be able to mitigate these cost increases through rental growth and “effective supply chain management”.
Announcing its financial results for the year ended 31 March 2015, the group reported profit before tax of £508.2m, up from £422.2m a year earlier.
The group had net assets of £2.39bn, up from £1.93bn in March 2014.
Portfolio valuation was up 18 per cent in the year and up 3.1 per cent in the first quarter of 2015.
GPE projects over the next two years
- 148 Old Street, EC1: planning permission for major refurbishment of the existing 97,800 sq ft building to create around 151,700 sq ft office space, completion early 2017.
- Hanover Square, W1: a mixed-use development scheme which deliver 223,600 sq ft of space and enhanced urban realm. The development scheme is a 50:50 joint venture with the Hong Kong Monetary Authority with a potential start upon delivery of the station structure by Crossrail.
- Tasman House, 59/63 Wells Street, W1: planning application submited to replace a 1950s building with 36,500 sq ft of new office and retail space.
- Oxford House, 76 Oxford Street, W1 (pictured): planning application due to be submitted for a 90,500 sq ft major refurbishment of the mixed-use property incorporating a significant increase in the retail space.
- Mortimer House, W1: 23,100 sq ft refurbishment scheme.
- 84/86 Great Portland Street, W1: 23,200 sq ft refurbishment scheme
Commenting on the results, Great Portland Estates chief executive Toby Courtauld said:”We are delighted to be able to report another year of strong results, driven by our development successes and rental growth, and maintaining our track record of long-term outperformance against all of our industry benchmarks.
“London’s economy has continued to outpace that of the rest of the UK and we can expect this to continue, assuming the inevitable uncertainty surrounding the outcome of the proposed EU referendum does not damage London’s appeal as a business capital.
“Both the risk appetite and employment intentions of the capital’s businesses remain expansionary and we anticipate their space needs to follow suit.”
He added that the developer was now in “execution mode”, and will deliver organic growth through developing, refurbishing and growing income across the group’s 3.6m sq ft portfolio.