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Our Strategy and operational progress

We have a clear and straightforward strategy. It is set and regularly reviewed in the context of medium to long-term trends in the property market and helps us define our strategic priorities for the year ahead. It has been a year of strong operational results.

Strategic priorities

  • Lease new space from developments above target ERV.
  • Manage development risks to generate maximum returns.
  • Deliver near-term programme on time and budget.
  • Add to medium and long-term pipeline.

Operational initiatives and activities

  • 340‚000 sq ft of office lettings took place at 180 and 60 Great Portland Street‚ W1 and 160 Tooley Street‚ SE1.
  • JV created for Blackfriars Road‚ SE1 scheme to mitigate risk.
  • Practical completion reached at 60 and 79/83 Great Portland Street‚ W1 in January 2008.
  • 160 Tooley Street‚ SE1 completion expected June 2008.
  • Planning consent gained for Wigmore Street‚ W1.

See Development
See Leasing developments profitably and
        Recycling capital case studies

Operating performance

  • Development leasing was 14% above March 2007 estimated rents.
  • Two schemes completed.
  • Profit on cost for completed developments 80.2% (2007: 103.7%).
  • Further 475‚000 sq ft of development prospects acquired through new Joint Venture.
Recycle capital

Buy properties

  • With low relative rents.
  • With angles to exploit.
  • To grow medium and longer term development programme.

Sell properties

  • With historically high capital values.
  • With limited further angles.
  • Where capturing rental growth will be difficult.
  • GCP joint venture formed with £655 million of properties at year end.
  • Acquisitions of £42.4 million made adjacent to existing holdings.
  • Met Building sold for £107 million post redevelopment and letting.
  • Other sales made in the year totalled £229 million.

See Recycling capital
See Recycling capital, Acquisitions and
        Repositioning case studies

  • GCP properties have rental reversionary potential of 33.2% at 31 March 2008.
  • Three new development prospects identified from new investments.
  • Met Building sale crystalised return of 156%.
  • Total asset sales of £336 million (2007: £203 million) enhancing Group liquidity.
Asset manage
  • Drive rental values and rental income higher.
  • Execute individual property strategies.
  • Create value through asset repositioning.
  • 85 new leases completed (2007: 47).
  • £25.0 million of rent roll generated by new leases (our share £19.8 million).
  • GCP/The Crown Estate lease restructuring and swap involving £358 million of property.
  • Total space covered by lettings‚ reviews and renewals 648‚500 sq ft‚ 21% of the portfolio.

See Asset management
See Leasing developments profitably and
        Creating rental growth case studies

  • Portfolio rental value growth of 12.4% (2007: 17.1%).
  • New leases were at rents 5.9% above March 2007 ERV.
  • Total portfolio reversionary potential is 34.1% (2007: 26.8%).
  • Void rate 3% (2007: 5%).
  • Fees from joint ventures £5.8 million (2007: £1.6 million).

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