Great Portland Estates: New CFO, Firmer Promises, and a Pivot to Selling
A New Voice, a Firmer Promise
When Jayne Cottam stood up to present her first results after taking over as CFO just five weeks prior, the market got more than a new face. Great Portland Estates delivered a record leasing year, but the headline was a promise that the 10%+ return on equity target would be hit this financial year – a step-change from the prior call, where CFO Nick Sanderson had cautioned that it was “one for the medium term” — Nick Sanderson, Chief Financial Officer (CFO) · 2025-11-18. In the current call, CEO Toby Courtauld went further, saying “we are on target to deliver 3x EPS growth over the medium term and a 10% plus return on equity this financial year” — Toby Courtauld, Chief Executive Officer · 2026-05-21. That acceleration is underpinned by the record leasing of GBP 70.9 million at 10.3% ahead of ERV, and a rent roll that grew 46% to GBP 153 million. Earnings per share jumped 63% to 8.5p, ahead of consensus, and the dividend was raised 4%.
From Buyer to Seller
The more consequential shift is capital allocation. GPE has pivoted decisively from net buyer to net seller, having already crystallized GBP 490 million of sales at a 2% premium to book value. In his prepared remarks, Courtauld stated, “we expect to be a net seller this year, too” — Toby Courtauld, Chief Executive Officer · 2026-05-21. The pipeline is now over GBP 1.2 billion of stabilized disposals, including the possible sale of Duke Street. This is the contracyclical model in action – as Courtauld previously explained, “you want to be contracyclical in the delivery of space when everybody else has run for cover” — Callum Marley, Analyst · 2025-11-18. The balance sheet supports the flexibility: LTV is 28.6%, liquidity sits at GBP 412 million, and a new ESG-linked RCF pushes the next refinancing to October 2028.
Rent Reality Check
Amid the optimism, there is a note of realism. The company trimmed its prime rental growth guidance from the prior 6-10% range to 4-7% for offices. During Q&A, Courtauld explained the rationale: “We're narrowing the range, I think, as we get more data and we understand more what's likely to happen in the market.” — Toby Courtauld, Chief Executive Officer · 2026-05-21 This is not a bearish call – he noted that prime rents still outperformed, delivering in "the 7s" last year. But with rental growth expected to moderate, the company is leaning on its development pipeline and fully managed flex business to drive the income growth needed to reach the 10% ROE.
The Flex Engine
The engine room of that growth is the fully managed flex portfolio, which now accounts for 32% of the book and is set to become an even larger contributor. Net operating income from this segment has tripled in two years to GBP 28 million, and the company targets a doubling to GBP 58 million over the medium term. This is capital-light, high-margin growth – the “record fully managed leasing” — Toby Courtauld, Chief Executive Officer · 2026-05-21 at 7.7% above ERV has driven customer retention above 50% and the service margin to 37%. The value creation is embedded in the development surpluses and the West End focus, where supply is almost non-existent. As Courtauld put it,
our model then is alive and well, and we are successfully exploiting the best versus rest bifurcation that we've talked about.
The market backdrop remains supportive – demand for space is at record levels, with 170,000 new office jobs expected by 2030 – but the company is no longer relying on rent growth alone. The shift to seller and the accelerated ROE timeline mark a strategic maturation. A new CFO, a firmer promise, and a more disciplined capital allocation: this is a company positioning for the next phase of the cycle.