London landlord Great Portland Estates has tipped office rents to keep rising after it secured another 17 new companies to its buildings and saw a jump in rental income.
New leases agreed in the quarter to 30 June will boost the firm’s annual income by £2.4 million.
Another £800,000 per year was secured via five rent reviews, 47% higher than the previous rent.
Income will be boosted even more with companies battling it out for office space as supply in the capital dwindles. Rents in the West End have reached over £150 per square foot.
Great Portland Estates has 2.5 million square feet of new properties it is planning.
Toby Courtauld, chief executive, said: “We can expect healthy tenant interest to generate both pre-lettings and higher rates of rental growth compared to last year, our expanded development programme will continue to deliver attractive returns for shareholders, and our balance sheet strength will allow us to exploit our many portfolio opportunities to the full.”
Sales in the period saw the group sell 95 Wigmore Street, which it held in a joint venture, for £222.4 million.
Sue Munden, an analyst at Panmure Gordon, said: “The London office market is very strong at present and Great Portland Estates is now monetising the benefits of the development pipeline and asset management programme it has been working on.”
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