Bloomberg News

Great Portland Plans Share Placement to Buy Properties

November 14, 2012

Great Portland Estates Plc (GPOR), the real-estate developer focused on London’s West End, raised 140.6 million pounds ($223 million) in a share placement, increasing its funds available for acquisitions by more than 50 percent.

More than 31 million new shares were placed at 450 pence each, London-based Great Portland said in a statement today. The company said earlier that it would have 400 million pounds in cash and unspent credit facilities after the placing.

The company said it’s in “detailed” discussions over three property acquisitions with a value of about 110 million pounds. The amount raised today is equal to about 10 percent of its share capital.

Great Portland has purchased sites around Oxford Street, the U.K.’s busiest shopping district, betting that rents and values will rise because development financing is scarce. The company said it has completed 159 million pounds of property acquisitions since March, all of them in the West End.

“Conditions in our central London market remain supportive,” Chief Executive Officer Toby Courtauld said in a separate earnings statement today. “Although the rate of leasing was below the long run average around the time of the Olympics, we are witnessing a solid pick-up in demand from prospective occupiers, particularly in the West End.”

Besides the three purchases being negotiated, at least three others are under consideration, the company said.

Lower Earnings

First-half net income declined to 76.7 million pounds, or 2.9 pence a share, from 79.1 million pounds, or 3.4 pence, a year earlier as finance costs increased, the company said today. Revenue rose about 12 percent to 33.4 million pounds.

The value of the property portfolio increased 4 percent since March 31 led by development sites. The company increased its first-half dividend by 3.1 percent to 3.3 pence.

Great Portland was little changed at 457 pence in London trading as of 1:34 p.m. The stock has risen 42 percent this year, giving the company a market value of 1.43 billion pounds.

To contact the reporter on this story: Ross Larsen in London at Rlarsen2@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.


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