Great Portland sees portfolio value slide

London landlord Great Portland Estates today said the value of its property portfolio fell 4% in just three months and warned it could not rule out a recession.

Chief executive Toby Courtauld said the estate was worth £1.54 billion at the end of June - £63.9 million less than at the end of March. Worst hit was the City market, where values tumbled 6.1% in the quarter compared with a fall of 3.4% in the West End.

Courtauld said: "The supply picture in the City is different from that in the West End. We have been saying for a while that we expect there to be an excess of supply in the City and that is turning out to be the case.

"The City is also more exposed to the financial services sector, which is having a more difficult ride than the rest of the economy. But the issues have moved from the financial world into the broader economy and the question remains how much of an effect that is going to have.

"It doesn't feel like a recession in the West End at the moment but we shouldn't rule that out. It would not be prudent to do so." He said the robust performance of the West End, which accounts for most of the firm's business through a large estate of offices and shops, particularly north of Oxford Street, meant it was well placed to weather the storm.

"Whilst we expect the economic backdrop to worsen during the balance of this year, we have the ingredients in place to enable our continued outperformance," he said.

The 4% fall in values in the second quarter meant the estate has now lost 9.3% of its value in 12 months. The West End is down 7.8% on a year ago while the City and Southwark is down 16.6%. Rents are still rising in the West End but have fallen in the City.

Great Portland's net asset value per share - a key measure of success at a property company - fell 7.6% in the three months to the end of June to 538p, down 16.2% on a year earlier.