Progress in central London office developments and the successful lettings of three Aldgate East spaces has led Helical to underline its confidence in the capital despite slashing its dividend.
In a trading update ahead of its annual general meeting, the London-listed property development firm said that it has let out much of the three flagship buildings it owns on the eastern perimeter of the City; The Loom, The Bower and The JJ Mack Building.
The London-headquartered firm also confirmed that the sale of 25 Charterhouse Square – also in the east of the City – to Ares Management went through in April for £43.5m. This was followed the sale of its 50 per cent stake in a new City office development in May.
But it was not enough to stop the firm cutting its final dividend dramatically, from 11.75p in 2023, to 4.83p this year.
Gerald Kaye, Helical’s CEO, said: “The leasing market for new “best-in-class” office developments and major refurbishments remains strong and these assets are showing continued rental growth.
“Our pipeline of new developments being delivered into a supply constrained market should enable Helical to deliver surpluses over a sustained period.”
The update from Helical comes in what is a fragile, unpredictable period for the London office market – both in terms of investment and take-up.
In what has been dubbed a ‘flight to quality’, Landlords of high spec, sustainable offices have found joy letting spaces out to firms keen to see staff return to the office. Those responsible for lower-quality spaces, however, have found their sites harder to shift.
Uncertainty around hybrid working, combined with the higher rate environment of the last few years, has also translated into a three-year slowdown in office investment. Last week it was revealed that not a single office building in the City sold for over £100m in the first half of the year.“
This AGM will be property grandee Kaye’s last for Helical, after he announced his retirement earlier this year. From tomorrow, Kaye’s replacement, Matthew Bonning-Snook, will take on the day-to-day running of the developer.
Kaye added: “This is my last update as Chief Executive of Helical plc before handing over the role to Matthew Bonning-Snook later today following the 2024 AGM. I wish him well and have every confidence in his ability to take the business forward as a London focused development company.”