Will Great Portland Estates be the bottom of the real estate market?

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Great Portland States (LSE:GPOR)Investors will be eager to see how the FTSE 250 Real Estate Investment Trust (REIT) has performed over the past six months when the results are released on Wednesday 24 May.

Like all real estate sectors, Great Portland’s core portfolio of central London office and London retail assets have seen sharp declines in valuations, with the Investment Property Databank (IPD) index showing 16% and an 11% year-on-year decrease, respectively.

Barclays analysts expect to see a NAV drop of 11% on the Great Portland assets for the period, resulting in a NAV per share of 706 pence, representing a 30% discount to the current share price. actions as of Friday, May 19.

However, forward facing will be the true tester for Great Portland.

Investors could be expected to rally around real estate trusts if the market indicates a cyclical bottom, so Great Portland will want to offer some optimism about its Estimated Rental Value (ERV) for the coming year.

“Given higher inflation and the ‘flight to quality’ trend, we will also look for any evidence that these issues are translating into higher rents,” Barclays added.

However, a good result on this front is not a given.

ERV numbers for the first half were mixed, with retail and office declines ticking just 1% higher, and full-year guidance at the time pointed to 0% ERV growth across all asset classes.

However, if the constituent LandSecs of the FTSE 100 full year results offer any cross reading (both have strong footing in central London office property), then consumer-facing retail assets are expected to rally further as consumer trends return to pre-Covid levels.

The results will be received on Wednesday, May 24.