GPE: Time to NAV-igate away from values

Research evidence excerpt

GPE: Time to NAV-igate away from values

ion growth, whereas our preferred

office exposures are increasingly income-led: In our view, the market environment has shifted

meaningfully over the past 12-18 months: investors are now rewarding visible cash earnings,

income durability and attractive earnings multiples more than theoretical asset value creation.

While GPE continues to frame the investment case around development surpluses, valuation

uplifts and NAV accretion, we believe the market is becoming less willing to capitalise future

embedded value that has yet to translate into earnings and cash flow. While GPE’s operational

momentum is strong and we forecast a higher five-year EPS CAGR (aided by capitalised interest) Source: IDC

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than both LAND and BLND, we do not think this is adequately reflected in GPE's starting

valuation, and we think GPE screens as an expensive way to access office earnings growth.

Within London Offices, we see a more attractive offering at recently upgraded British Land (see: European Real Estate

Cash flow driving strong TSR: u/g BLND to OW; reiterate LAND OW). Eleanor Frew, CFA

+44 (0)20 3555 0748

Flex remains a differentiator, but still not meaningful enough: A key area where we do see eleanor.frew@barclays.com

genuine strategic differentiation is in flex and fully managed space. We continue to like the Barclays, UK

structural outlook for flex products, for instance Savills noted that at the end of H1 2025, 72% of Paul May, CFA

+44 (0)20 3134 1444

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies paul.j.may@barclays.com

covered in its research reports. As a result, investors should be aware that the firm may have a Barclays, UK