Office workers are making a comeback in central London, and this resurgence is not only good news for Great Portland Estate (GPE), but also for the retail sector. GPE, a property company centered on the capital, has seen an increased demand for its retail and office spaces as workers return to the city. In their recent half-year results statement, GPE expressed confidence in their position, stating that they are well-prepared for the return of the business cycle.

However, GPE is not immune to the challenges of the market. Over the past couple of years, property values have experienced a decline, and GPE reported a 10.3% decrease in the current value of its portfolio. The decline was primarily driven by a 12.4% decrease in the value of its retail properties, despite their prime locations in London’s West End. Nevertheless, the total value of GPE’s portfolio remains at £2.3 billion.

A positive sign for GPE is the significant number of workers who have returned to their offices in the company’s West End portfolio. GPE reports that 75% of workers have come back to the office, with the number rising to 93% near Elizabeth Line stations. This development is undoubtedly promising for retailers, as it suggests a potential increase in foot traffic and consumer spending.

In terms of market lettings, GPE has reported that rents are, on average, 13.4% higher than the estimated rental value by March 2023. With an annual rent role of £11.2 million, GPE’s leasing markets seem to be performing well. Chief Executive Toby Courtauld acknowledges the impact of macroeconomic concerns and rising interest rates on property valuation but remains optimistic about the company’s future. Courtauld emphasizes the healthy fundamentals of the leasing markets and the increasing demand for sustainable and high-quality spaces.

Courtauld also highlights a shortage of new Grade A supply in the market, resulting in higher prime rents. As a result, GPE has upgraded its rental growth forecasts for the second half of the year. With GPE in a strong position and London expected to outperform, Courtauld expresses confidence in the company’s future.

Overall, the return of office workers to London is proving to be beneficial for GPE and the retail industry. While GPE has faced challenges in the property market, the company remains confident in its prospects and expects continued growth. As workers settle back into their routines and consumer demand rises, the outlook for GPE and the London property market appears positive.

Disclaimer: This article was produced with the assistance of an AI writing assistant. All information, statistics, and statements were based on publicly available information at the time of writing.

Useful links:
1. GPE Official Website
2. Mayor of London Official Website