Derwent London achieves strong start to the year

Property group Derwent London said it made a strong start to the year as rents on open market lettings in first quarter were 3.6 per cent ahead of the previous quarter.

Property group Derwent London said it made a strong start to the year as rents on open market lettings in first quarter were 3.6 per cent ahead of the previous quarter.

In the three first three months of the year, the company let 268,000 square feet (sq ft) at an annual rent of £3.5m, 1.7% above the estimated rental values (ERV) at the end of December.

The biggest letting in the quarter was 217,000 sq ft on Hampstead Road in north west London to University College London for £1.6m per annum.

Derwent said the letting provided income, reduced void cost by £1.0m per year and preserved development options at the site until uncertainty surrounding the HS2 rail project is resolved.

In a milestone for the company during the quarter, the company completed the 85,000 sq ft regeneration of The Buckley Building and the pre-let refurbishment and extension of the top two floors at Morelands Buildings in east London.

After beginning work on 16 apartments at Queens on Bishop's Bridge Road in west London, the company is on site at five major projects totalling 404,400 sq ft.

Capital expenditure in the first quarter increased to £31.5m, including £1.6m of capitalised interest.

However, the disposal of properties, which raised £17.8m before costs, helped keep net debt from rising too much. It was up £878.8m at March-end from £874.8m at the end of 2012.

Overall gross interest cover for the three month period was 350% and the group's loan-to-value ratio remained low at 30%.

"Derwent London has made a good start to 2013 with further lettings above ERV, a high level of enquiries for space and continuing rental growth in our markets," said Chief Executive Officer, John Burns.

"Against this background we remain confident with the scale of our development programme and the prospects for our substantial stock of future projects."

Shares rose 1.33% to 2,433p at 11:03 Friday.

RD

Recommended

Best junior stocks and shares ISA platforms
Isas

Best junior stocks and shares ISA platforms

A junior stocks and shares ISA is a great way to save for your child tax-efficiently. But it can be confusing deciding which investment platform to ch…
25 Nov 2022
Share tips of the week – 25 November
Share tips

Share tips of the week – 25 November

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
25 Nov 2022
Investing in a recession: 5 moves investors should make now
Investment strategy

Investing in a recession: 5 moves investors should make now

As we enter a recession, here’s what investors should do with their portfolios.
23 Nov 2022
It’s time to focus on Fuller’s
Share tips

It’s time to focus on Fuller’s

The pub sector has had a torrid two years, but this group is resilient and poised to prosper. We take a closer look at Fuller’s.
21 Nov 2022

Most Popular

Wood-burning stove vs central heating ‒ which is cheapest?
Personal finance

Wood-burning stove vs central heating ‒ which is cheapest?

Demand for wood-burning stoves has surged as households try to reduce their heating costs this winter. But how does a wood burner compare with central…
29 Nov 2022
Fan heater vs oil heater – which is cheaper?
Personal finance

Fan heater vs oil heater – which is cheaper?

Sales of portable heaters have soared, as households look to cut their energy costs. But which is better: a fan heater or an oil heater? We put them t…
21 Nov 2022
Best regular savings accounts – November 2022
Savings

Best regular savings accounts – November 2022

You can earn an attractive rate on the best regular savings accounts. We tell you the best on the market to take advantage of right now
29 Nov 2022