Great Portland Estates, the Central-London property investor, saw a near-11 per cent rise in net asset value (NAV) and a strong increase in profits last year, as it said it expects to continue outperforming in the future.
NAV per share rose by 10.7% to 446p in the year ended March 31st, while the value of its property portfolio improved by 8.0% to £2.33bn.
The total shareholder return for the year was 40.7%, ahead of the FTSE 350 real estate benchmark of 21.3%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The company said that while the economic outlook for the UK and Europe is "turbulent", conditions across property markets in Central London, particularly in the West End, remain "favourable" helped by strong tenant demand and low levels of supply.
"Over the next few years, absent a material economic set back, we expect this balance to move further in landlords' favour, supporting our expectations for rental growth," said Chairman Martin Scicluna.
Meanwhile, the investment market in London is continuing to attract a significant flow of capital from around the world, he said. The company raised £138m through a share placing in November and has already invested over 80% of that.
Profit before tax surged by 27.6% to £22.2m during the year and the firm said it expects the bottom line to be "significantly enhanced" next year by additional rental income it created through the leasing of development schemes and acquisitions.
The company declared a final dividend of 5.3p per share, taking the total dividend to 8.6p, up 2.4% year-on-year.
As for the outlook, the company said that it expects to "continue outperforming" due to strong demand, a good development pipeline, conservative gearing (42.8%) as well as "plentiful, low-cost firepower". The company had undrawn facilities of £282m by the end of the period.
"GPOR has delivered strong, benchmark-beating NAV growth and is repositioning to harvest rental growth, and is buying the raw material to apply its asset management skills and increasingly drive earnings," said analysts at Jefferies on Wednesday morning.
The stock was down 1.0% at 592p in early trading.
Six investment funds for beginners
Farming isn't for the faint-hearted – and isn't profitable
