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London landlord Great Portland Estates (GPE) today reported the smallest fall in commercial property values for a year — adding to hopes the worst of the slump has passed.
The firm, which owns offices and shops in the West End, the City and Southwark, said the value of its portfolio fell 5.1% in the second quarter to £1.03 billion.
It was the smallest decline since the second quarter last year, and follows two years of misery for the commercial property market which has seen values crash 40% to 50% since the peak in 2007.
GPE, which recently raised £175 million through a rights issue to fund a spending spree in the capital, said it is on the look out for bargains.
Chief executive Toby Courtauld said: “We said in May that we expected investment markets to recover ahead of occupational markets and we are now seeing an increase in investor demand for well-let, small, prime assets.
“It remains the case that many owners are under significant financial stress. With our significant financial resources, we are confident that we can exploit these conditions.”
Rental values fell 5.3% in the quarter, but despite the headwinds, GPE made 35 new lettings generating £1.8 million of extra rent for the group.
“The property market environment continues to be challenging with further falls in property values this quarter, driven principally by reducing rental values,” said the GPE boss.
