Derwent London staring down another record year for lettings

Derwent London updated the market on its third quarter trading on Thursday, claiming it was staring down another record letting year, reporting that it has let or pre-let 674,800 square feet achieving £41.2m pa of rent in the year-to-date.

The FTSE 250 firm said that was a 16% increase from the £35.5m announced in September 2017.

Lettings in the year-to-date were 1.3% above December 2016 estimated rental value, while second half lettings to date were 2.3% above June 2017 ERV.

Its EPRA vacancy rate fell to 1.4% from 1.9% in June 2017, with the 401,000 square feet of developments completed in 2017 now 94% let.

Of those developments, the White Collar Factory in EC1 which was completed in the first half was now 92% let, and the Copyright Building in W1 was completed and sold for £166.2m in the fourth quarter.

Derwent said another 620,000 square feet was currently under construction, with a minimum of 45% pre-let.

At least 86% of the office space at 80 Charlotte Street in W1 was now pre-let, the board added.

Property disposals in the year-to-date totalled £496m,which was 10% above December 2016 values.

At 30 September, cash and undrawn facilities were £422m and the loan-to-value ratio was 15.3%, the Derwent board reported.

The proforma loan-to-value ratio, adjusting for disposals since September 2017, stood at 12.7%.

“Good occupier and investment demand means that 2017 will be a record year for Derwent London's lettings and investment disposals even with lower UK economic growth and political uncertainty,” said chief executive John Burns.

“The continuing positive letting momentum reinforces our earlier decision to move forward with our next major project at Soho Place W1.”