Great Portland Estates has stepped up its development programme after reporting strong growth in rents on office space in London’s West End.

The London developer’s property portfolio rose by 7.3 per cent in value since March 2010, ahead of expectations. Net assets per share jumped 11 per cent to 314p.

Rental values rose by 5.1 per cent, mostly through increases in its West End offices portfolio and thriving demand from tenants in the financial and creative industries.

Great Portland, which raised £166m in a rights issue last year to fund acquisitions, has committed £320m to buying properties in the capital in the past 18 months.

Toby Courtauld, chief executive, said the acquisitions had outperformed the rest of the portfolio, rising in value by about 18 per cent since purchase, which has meant that the company has already begun to consider recycling the assets at a profit.

The company identified new development opportunities and said talks were progressing with tenants to pre-let a large office development at 100 Bishopsgate in the City of London.

Great Portland has 11 near-term development projects totalling 1.8m sq ft, with four schemes comprising 205,000 sq ft on site and progressing towards completion in 2012.

Mr Courtauld said the increase in prices in London property had slowed to a standstill, which meant that future value gains would likely be from rental growth.

“It is all about rents now as yields have already moved a long way. While there continues to be a surfeit of buyers over sellers, particularly from overseas, we believe these more sedate conditions will persist into 2011 as the uncertain macro environment will continue to affect sentiment in the short term.”

Underlying profits rose 11.1 per cent to £15m when adjusted for valuation movement, with earnings per share down 11.1 per cent to 4.8p. After the revaluation surplus, the company returned to a profit before tax of £116.8m, after suffering a £29.8m loss in the same period last year when the market was in decline. The interim dividend is 3.1p (3p). The shares closed down 2.4p at 345p.

Great Portland has secured a new £350m five-year credit facility, which Timon Drakesmith, finance director, said was one of the largest property debt packages agreed this year.

“The big banks are making the decisions about who to support in the next cycle,” he said.

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