Firm upgrades rental growth forecast for second half
Great Portland Estates has become the latest listed developer to confirm the London office market is on the way to recovery with the firm saying it has committed to spending £400m on schemes since the spring.
Earlier this week British Land and Landsec both said the market was improving after the impact of covid-19 and the change in working patterns and yesterday GPE said it has upgraded its rental growth forecast for the second half of its financial year because of increased demand for hard-to-find grade A space.
Among the projects it is pressing on with are a £75m scheme in Piccadilly, known as French Railways House, and set to be built by Mace, while it said work on Minerva House, which has now been given planning by Southwark Council, could start early next year.
The Minerva House scheme, which includes a 140,300 sq ft office refurbishment and adding several storeys to a building completed in the 1980s, was submitted for planning in November 2021.
Building understands that Multiplex has been lined up for the job with others working on the scheme including Opera as project manager, QS Gardiner & Theobald, structural engineer Heyne Tillett Steel, M&E consultant Hoare Lea and Ben Adams Architects.
It said work on 2 Aldermanbury Square, being built by Lendlease, was due to finish in early 2026.
The firm also said it was still mulling what to do next on its proposed £200m New City Court scheme which was refused planning by communities secretary Michael Gove earlier this autumn.
GPE is also upgrading several offices mainly in the West End while it has also bought a series of buildings in the area, where 75% of its portfolio is, which it said could be turned into a HQ office building at Soho Square with retail fronting Oxford Street.
GPE chief executive Toby Courtauld said: “The fundamentals in our leasing markets remain healthy. With customers increasingly demanding the very best, sustainable spaces, and discounting the rest, they are competing in a market increasingly starved of new, Grade A supply, putting further upward pressure on prime rents and we have upgraded our rental growth forecasts for the second half.”
The developer said it had £700m of potential acquisitions under review. “Our focus remains on development and repositioning opportunities, buildings that would suit our flex offer and assets that are challenged from a sustainability perspective,” it added.
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