Toby Courtauld, the chief executive of Great Portland Estates, has claimed that the role of the office “has got more important not less” over the course of 2020.
He said he noticed GPE’s effectiveness in all its operations became “materially stronger” once he and his colleagues were back in the office in September.
Speaking to EG as the business reported its latest half-year results, Courtauld said: “There was more creativity, more collaboration, more discussion, more ideas being generated.
“This idea that we can do all of that remote from each other in two dimensions on a screen to my mind is nonsense.”
Courtauld said it was unlikely that workers would be heading back to the office in the near future, but that the news of the vaccine may facilitate a return at some point next year.
He said he does not think there will be fundamental changes to offices in the long term, but that they will provide more spaces for collaboration and more “domestic comforts” than they have traditionally.
He does, however, predict that the market will create a distinction between investors and developers “who are alive to the themes and the trends and the criteria the modern occupier is looking for” and those that are delivering buildings of the past in the wrong locations or who are not investing in upgrading those assets.
“London remains a crucial centre for business culture and human collaboration and we don’t think that Covid fundamentally changes that,” said Courtauld. “It’s an ugly scene at the minute given the lockdown but it’s still as fabulous a city as ever and will return to its former glory without a doubt in my book.”
GPE reported a 6.6% fall in the value of its portfolio to £2.5bn at the end of September, compared with March. The firm said this was mainly the result of a 3.9% decline in rental value, with offices down 0.7% and retail down 13%.
Net rental income fell 22.5% to £30.6m, compared with a £39.5m equivalent last year, owing to sales of assets, income running out on some of its development pipeline – including 50 Finsbury Square which GPE is anticipating commencing work on in January – and some bad debts because of Covid-19.
However, GPE agreed leasing deals worth £6.6m in the period and had another £6.8m worth of deals in the pipeline.
Courtauld said there was a potential further £30m of lettings being negotiated, but not yet under offer. He said GPE was already having “some pretty healthy discussions” over its three near-term development projects and two were still without planning.
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