(Reuters) -London-focused commercial property developer Great Portland Estates Plc (LON:GPOR) lifted its annual rental value outlook and joined bigger rivals in returning to interim profit on Friday, buoyed by strong leasing momentum.
Office property firms in the UK are gradually recovering after battling lower rental levels and a steep decline in valuation during the pandemic, as people increasingly return to cities, particularly in the key office hub of London.
"We are seeing healthy growth in office jobs which is driving renewed occupier demand for City and West End offices, up by more than 50% since this time last year," Chief Executive Officer Toby Courtauld said in a statement.
The company said a per share measure that reflects the value of its buildings — EPRA Net Tangible Assets — rose 2.2% to 796 pence.
Great Portland, which has 2.5 million square feet of Central London property, said overall portfolio valuation was up 2% at 2.5 billion pounds ($3.38 billion) as of September-end and echoed its rivals in highlighting strong demand for flexible working spaces, which now account for 15% of its office properties.
The FTSE 250-listed company said it expected rental value to increase between 2% and 5% for the year ending March 31, 2022, as it reported a profit after tax of 62.2 million pounds for the six months ended Sept. 30, compared to a loss of 154.8 million pounds a year earlier.
Earlier this week, UK commercial property giants Land Securities Plc and British Land Plc swung back to half-year profits, partly helped by strong rents at their core office portfolios. [L4N2S71VO]
($1 = 0.7405 pounds)