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UPDATE 2-Great Portland's retail portfolio valuation plunges on pandemic hit

* Retail portfolio valuation plunges 18%

* Central London office take-up drops to record low

* Expects rents and capital value to fall further in London (Adds details on the results, background, shares)

Nov 11 (Reuters) - Property developer Great Portland Estates on Wednesday reported an 18% plunge in the valuation of its retail portfolio as coronavirus restrictions hit the industry, and said office take-up in central London had dropped to record lows.

The FTSE 250-listed company, which owns 2.6 billion pounds ($3.5 billion) worth of retail and office property in central London, said it expects rents and capital values in the British capital to fall further.

“The trajectory of COVID-19 continues to dominate the economic backdrop and disrupt the activities of many of our occupiers across London,” the company said.

“Given this challenging economic and operational context, we expect capital values and rental levels to decline as London’s property markets adjust to a global recession.”

Shares were down 2% at 686 pence by 0819 GMT, taking year-to-date losses to 20%.

Property owners and tenants have been working together to ride out the coronavirus crisis, with the retail, hospitality and leisure sectors hit the hardest in large urban centres.

Occupiers of retail properties are struggling with rents due to a plunge in footfall during the virus curbs, while office space providers are grappling with empty buildings and defaults as companies adopt work-from-home policies.

Workspace Group, which owns and manages 4 million square feet of business space in London, swung to a first-half loss and pushed back a decision on dividends as more customers vacated and downsized during the crisis.

Great Portland said it had collected just 83% of its rent during the first half of the year, with 7.6 million pounds still remaining unpaid as on Sept. 30.

The company said its net rental income in the six months to Sept. 30 fell to 30.6 million pounds from 39.5 million pounds a year earlier.

The central London-focused developer said however that a scarcity of high-quality space had resulted in relative support for prime rents and that it believed it was well-placed to weather market volatility.

It also said demand for flexible, fitted spaces, which make up 13% of its office portfolio, has seen accelerated demand due to the COVID-19 pandemic.

$1 = 0.7528 pounds Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Uttaresh.V and Jan Harvey

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