Great Portland Estates Reports Strong H1 2025 Results with Robust Leasing and Growth Outlook

Developments and refurbishments: six on site, four to follow

The development engine is busy, with six schemes on site and four more about to start. Importantly, the three committed HQ schemes are de-risked by pre-lets and strong interest:

• 2 Aldermanbury Square, EC2 – 322,600 sq ft, fully pre-let to Clifford Chance with occupation in Q1 2026. From the 30 September valuation, c.£4 million of future profit expected (market yield shifts since commitment mean a 16.4% loss on cost versus the original underwriting).
• 30 Duke Street, St James’s, SW1 – 70,900 sq ft, offices fully pre-let to CD&R, with £44 million costs to come and an expected 39.5% profit on cost, 20.9% ungeared IRR and a 7.1% development yield. Completion Q3 2026.
• Minerva House, SE1 – 143,000 sq ft. Costs rose £14 million due to on-site complexities and supply chain insolvencies, but still guided to 15.0% profit on cost, 10.0% IRR and 6.9% development yield; c.40% under offer. Completion Q1 2027.

Two Fully Managed refurbishments completed in the period with strong traction:

• 141 Wardour Street, W1 – fully let within two months, £6.1 million annual rent, £3.8 million NOI, at £279 per sq ft.
• 170 Piccadilly, W1 – one floor pre-let, three under offer; targeting £300+ per sq ft on the best space.

Elsewhere, the Courtyard WC1 and 7/15 Gresse Street WC1 are underway or permitted, together expected to deliver £22.4 million of annualised rent roll and £12.9 million NOI for £97 million of capex. Across the six on-site schemes, remaining capex is £290 million with an expected development surplus of £88 million, most of which should be captured over the next 18 months. Four further HQ schemes require £392 million of future capex with an anticipated surplus of around £91 million.

Valuation, NAV and earnings: edging up

The portfolio rose 1.5% on a like-for-like basis to £3.1 billion. Offices were up 1.8% (Fully Managed +1.8%), while committed developments climbed 6.1%. Rental values increased 2.6% overall, with prime offices stronger. The West End outperformed (+2.9%) versus the rest of London (-1.9%).

• EPRA NTA per share: 504 pence, up 2.0% since March.
• IFRS profit after tax: £58.9 million.
• EPRA earnings: £15.7 million; EPRA EPS 3.9 pence, up 69.6% on H1 2024.
• Interim dividend: 2.9 pence per share (1.5 pence as a REIT PID).

Balance sheet: more firepower, lower leverage post deals

GPE has refreshed liquidity. A new five-year £525 million ESG-linked revolving credit facility was signed in October at a 105 bps margin over SONIA, replacing the prior £450 million line. The £75 million term loan was repaid and a separate £150 million ESG-linked RCF was extended to October 2028.

• Pro forma EPRA LTV: 28.2% after the 1 Newman Street sale and refinancings (30 September reported: 34.0%).
• Pro forma cash and undrawn facilities: over £462 million.
• Weighted average debt maturity: c.5.9 years pro forma (4.2 years at period end).
• Interest cover under covenants: 15.5x; property values would need to fall c.35% before covenant breach (46% post-sale sensitivity noted).

Debt costs are contained: weighted average cost of debt for the period was 5.0% (4.6% excluding fees at period end), with 72% fixed or hedged.

What this means for shareholders

Three things matter here. First, pricing power. Signing at 7.1% above ERV in the half, and 30.9% above ERV on space under offer, tells you demand is concentrated in the top tier. That favours GPE’s West End-centric, premium product mix.

Second, capital discipline. Selling stabilised assets slightly ahead of book to fund higher-return projects is sensible. The headline sale at 1 Newman Street crystallised value at an attractive yield and bolstered liquidity when the pipeline needs it.

Third, execution risk is real but managed. Minerva’s cost increase is a reminder that refurbishments in London are not risk-free. That said, the committed HQ schemes are substantially pre-let, and the Flex refurbishments are leasing well. Guidance for FY26 rental growth is maintained, and management is targeting a prospective >10% return on equity and a three-fold increase in EPRA EPS over the medium term. Those are ambitions, not guarantees, but the first-half delivery points the right way.

Bulls vs bears: my quick take

• Positives: outperformance on leasing; West End skew; Fully Managed traction and premium pricing; valuation and NTA ticking up; stronger liquidity with lower pro forma LTV; development surpluses front-end loaded into the next 18 months.
• Watch-outs: build cost and supply chain volatility (seen at Minerva); macro jitters into the UK Budget; vacancy modestly higher after completions; earnings still modest at 3.9 pence EPRA EPS in H1 while the development machine ramps.

Key numbers at a glance

New leases and renewals (H1)	£37.6 million p.a., 7.1% above ERV
Rent roll	£138.3 million, up 12.3%
Portfolio valuation	£3.1 billion, up 1.5% like-for-like
EPRA NTA per share	504 pence (+2.0% since March)
EPRA EPS (H1)	3.9 pence (+69.6%)
IFRS profit after tax (H1)	£58.9 million
Interim dividend	2.9 pence per share
Disposals / Acquisitions	£292 million sold (1.7% above book); £18.0 million bought
Pro forma EPRA LTV	28.2%
Liquidity (pro forma)	£462 million cash and undrawn facilities

Outlook and events

Management expects continued growth in property values and EPRA NTA in H2, with EPRA EPS broadly in line with H1 and “meaningful upside” over the medium term as the pipeline delivers. Near term, GPE still sees supportive supply-demand dynamics in prime central London. For those who want more detail, the results presentation is available at brrmedia.news/GPE_HY_2026 and materials are on gpe.co.uk/investors/latest-results.

Bottom line: this is a confident update from a landlord built for the top end of London offices. If GPE keeps converting its development book at today’s pricing, the pathway to a higher ROE and EPS looks credible. Keep an eye on build costs and leasing velocity into 2026, but for now, momentum is on their side.