Derwent London eyes Crossrail profits

Derwent London, the real estate investment trust, is pushing up its dividend as it looks to cash in on the capital's Crossrail project.

The group owns several well known properties in central London, including the Angel Building in EC1, in which the online travel agent Expedia has taken 93,400 square feet (sq ft) at a cost of £3.8m per year.

That deal gives an indication of the kind of tenants Derwent is looking to secure following a year in which its portfolio increased in value by 7.6% to £2.6bn. The net asset value per share grew 15.4% compared to 2010 to 1,701p while gross property income increased to £125.5m from £119.4m in 2010.

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Derwent's final dividend will be 21.9p per share come payment in June, pushing the total dividend for the year to 31.35p, a gain of 8.1% over 2010.

The group believes Crossrail, a rail project that will connect Maidenhead in the west to Shenfield in the east, will have significant benefits both for London and Derwent's bottom line.

Planning applications are in for a major regeneration at 1 Oxford Street. The 275,000 sq ft scheme would be built above the Tottenham Court Road Crossrail and London Underground stations. Derwent has also received planning consent for two projects close to the Farringdon Crossrail interchange.

Derwent has also agreed a joint venture to redevelop 1-5 Grosvenor Place with its freeholder on the site, confusingly called Grosvenor. It has sold 50% of a restructured lease to its partner for £6m, with a view to creating a new mixed use development on what is a prime London location.

Derwent shares were unmoved at 8:53. Over the last 12 months the stock has gained 0.8%.

BS