Toby Courtauld, Great Portland’s chief executive, said the coronavirus (COVID-19) pandemic continues to disrupt the activities of many businesses across London.
“Whilst rental collection and occupancy rates have improved across the portfolio since March, many sectors remain challenged,” he noted in a trading update.
Great Portland said overall it had collected 73% of rent due for the September quarter including deposits but only 28% had been collected for pub and restaurant tenants.
The company said it was helping those struggling to pay rents through monthly payment terms, deferring rental payments or allowing rental holidays.
Two tenants went into administration during the quarter, it added.
Prime minister Boris Johnson is to announce new measures today to try to curb the recent spike in COVID-19 infections, many of which are predicted will directly impact pub and restaurant opening times.
Courtauld pointed out that Great Portland was ‘well-positioned for any eventuality’.
“Whilst we expect the near term outlook to remain unpredictable, we remain firm believers in the long term appeal of well-designed and located offices and of London’s role as a dominant global city.
“Our low leverage and high liquidity provide resilience and significant capacity for growth,” he concluded.
Peel Hunt notes that previous rent collection for March and June now stands at 69% (or 82% after rent deposits) and the company will make a provision of GBP8.3mln for the outstanding amount in the upcoming first-half results.
“The company made 5 lettings in the period totalling 33,000 sq ft and although these are relatively small, it’s encouraging to see the rent being agreed on average 5% ahead of March’s level.”
Peel Hunt noted that Great Portland shares trade on a 23% discount to spot NAV with a 2% dividend yield, but the broker’s target price is 630p and its investment view ‘reduce’.
Shares rose 1% to 649.6p.
— adds share price, broker comment —