GPE braces for Brexit dip in London

Great Portland Estates has said it is braced for a “negative impact on economic growth in London” following the EU referendum.

In a trading statement, the developer’s chief executive Toby Courtauld said: “In the near-term, we expect confidence to reduce and some business investment decisions to be deferred whilst negotiations to establish our trading arrangements with the EU are undertaken.

“As a result, we can expect London’s commercial property markets to weaken during this period of uncertainty with the benefits of lower bond yields and weaker sterling offset by reduced rental growth prospects.”

The firm said it was well-positioned to get through any dip, given three years of net property sales, giving a strong balance sheet, while 62% of its active development programme is already pre-let or pre-sold.

Prior to the Brexit vote, the firm said it experienced a strong three months of leasing.

Its development programme includes eight committed schemes comprising a combined 851,200 sq ft of floor space, 81% in London’s West End, all expected to complete in the next 18 months. The schemes include 420,000 sq ft mixed-use scheme Rathbone Place (pictured).

The firm said it was making “good progress” across further two near-term uncommitted schemes, comprising 311,800 sq ft, including planning permission secured at Oxford House in central London, with potential starts over the next two years.