JP Morgan has reiterated its ‘overweight’ rating on Great Portland Estates (LSE:GPOR), citing improving fundamentals in the London office market and rising demand linked to AI.
GPE remains the firm’s top pick among European office stocks, with no other UK or continental office names currently rated ‘overweight’ apart from Spain’s Merlin Properties.
In a six-month update to its London office sector outlook, JP Morgan highlighted four key trends: a drop in citywide vacancy, continued rent growth, persistently low construction levels, and a rebound in high-value transactions.
Analysts noted that new office construction in London hit a 21-year low in 2025, tightening future supply just as demand recovers post-Covid.
“There’s a growing risk London could run out of suitable office space,” the note stated, referencing reports from December.
Early 2026 has already seen multiple £100m-plus buildings go under offer, indicating renewed investor confidence.
JP Morgan also expanded its 2026 thematic focus on AI, suggesting AI-driven sectors are likely to bolster office demand.
However, the firm expressed caution on broader European markets, maintaining neutral or underweight ratings on most office-exposed stocks in France, Germany, and Spain outside of Merlin.
The shares were up 0.6p at 339p.