Great Portland Estates PLC on Thursday said it will raise £350 million from the rights issue of new shares, after sighting opportunity in London to make further acquisitions and announcing one that it just made.
The London-based office building developer said its pretax loss widened in the financial year that ended March 31 to £307.8 million from £164.0 million the year before.
Revenue rose 4.6% to £95.4 million from £91.2 million, but Great Portland took a bigger loss on valuation of investment properties of £267.3 million, compared to £145.0 million last year.
Great Portland maintained its final dividend at 7.90 pence per share, bringing the total dividend to 12.60p, also consistent with the previous year.
Chief Executive Toby Courtauld said: ‘We remain strong believers in London’s long-term prospects; whilst its occupational markets, particularly for centrally located, Grade A space continue to power ahead with growing demand and shrinking supply.’
In the recent financial year, Great Portland acquired three properties off-market for £112.9 million as it continues to expand its portfolio.
On Thursday, Great Portland revealed it exchanged contracts to acquire the long leasehold interest of The Courtyard WC1 in London. The office and retail space will be acquired for £28.6 million, alongside a property swap of another London asset worth £18.2 million.
Investment Manager James Harrop-Griffiths commented: ‘This transaction represents a unique opportunity to recycle capital from a low-yielding retail asset into a fantastic office development opportunity.’
To do more of the same, Great Portland launched a three-for-five rights issue to raise approximately £350 million through the issue of 152 million new shares at 230.00p each.
Great Portland Shares were down 1.4% to 416.55 pence each in London on Thursday morning.
Management said this will allow the company to take advantage of further acquisition and development opportunities across London at a time in which higher interest rates have pushed valuations down in line with levels last seen in 2009 in real terms.
The company is currently tracking £1.4 billion of acquisition opportunities alongside a watchlist of the same sum.
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