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DLN Derwent London Plc

2,196.00
0.00 (0.00%)
10 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Derwent London Plc LSE:DLN London Ordinary Share GB0002652740 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 2,196.00 2,198.00 2,204.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Real Estate Investment Trust 190.5M -476.4M -4.2426 -5.19 2.47B

Derwent London PLC Qtr1 2017 Business Update (7923E)

11/05/2017 7:01am

UK Regulatory


Derwent London (LSE:DLN)
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From May 2019 to May 2024

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RNS Number : 7923E

Derwent London PLC

11 May 2017

11 May 2017

Derwent London plc ("Derwent London" / "the Group")

FIRST QUARTER BUSINESS UPDATE

FURTHER LETTING PROGRESS AND SIGNIFICANT DISPOSALS ABOVE BOOK VALUE

Highlights

   --      In 2017 to date we have let or pre-let 260,100 sq ft achieving rents of GBP17.0m pa: 

o 48% increase from the GBP11.5m announced with the 2016 results on 28 February

o 0.9% above December 2016 ERV

o Lettings since the end of February 4.6% above ERV

-- White Collar Factory now complete, 72% let with the majority of the remaining space under offer

   --      Three developments totalling 727,000 sq ft remain under construction, 30% pre-let 

-- Property disposals agreed in the year to date total GBP327m, 6.7% above December 2016 values

   --      LTV ratio 16.5% at 31 March 2017, with cash and undrawn facilities of GBP359m 

John Burns, Chief Executive Officer, commented:

"Following the excellent start to the year that we announced with our results in February, demand for our product remains strong and our letting progress continues. In addition, our sales activity demonstrates resilient investment demand."

Webcast and conference call

There will be a conference call for investors and analysts at 09:00 BST today.

To participate in the call, please dial the following number: +44 (0)20 3059 8125

A recording of the conference call will also be made available following the conclusion of the call on www.derwentlondon.com

For further information, please contact:

 
 Derwent London              John Burns, Chief Executive 
  Tel: +44 (0)20 7659 3000    Officer 
                              Damian Wisniewski, Finance 
                              Director 
                              Quentin Freeman, Head 
                              of Investor Relations 
 Brunswick Group             Simon Sporborg 
  Tel: +44 (0)20 7404 5959    Tim Danaher 
 

Active demand leads to further lettings (see Appendix 1)

In the year to date we have let or pre-let 260,100 sq ft at GBP17.0m pa. This is an increase of GBP5.5m from our announcement on 28 February. The major deals with Arup and Adobe have previously been reported and we have now let all the available refurbished space at 20 Farringdon Road EC1 and 78 Chamber Street E1, as well as recently regenerated space at Greencoat & Gordon House SW1. Following the letting of the fifth floor to Wilmington, Phase 1 of The White Chapel Building E1 is now 93% let with the remaining space under offer. On average our lettings have been 0.9% above December 2016 ERV, with activity since 28 February 4.6% above. Our EPRA vacancy rate has risen from 2.6% to 3.2%, which includes the recently completed White Collar Factory EC1.

Good progress on developments (see Appendix 2)

The delivery of White Collar Factory has reduced our pipeline under development by 29% to 727,000 sq ft. At The Copyright Building W1, where the entire office element of 87,150 sq ft was pre-let in 2016, we remain on track for delivery of the building in H2 2017 and are now marketing the retail space. The 2019 project deliveries, which represent 85% of our on-site programme, are progressing well with the pre-letting in Q1 of 42% of the offices at 80 Charlotte Street W1 on a 20-year term to Arup with fixed annual increases of 2.25% for 15 years.

Significant disposals activity (see Appendix 3)

At the time of our 2016 results, we reported GBP327m of disposals before costs at 6.7% above December 2016 book values. The sale of 132-142 Hampstead Road NW1 for GBP130m completed in March and the GBP197m sale of 8 Fitzroy Street W1 is expected to complete in June 2017.

Finance

Capital expenditure in the first quarter totalled GBP48.1m including GBP2.6m of capitalised interest. However, following the sale of Hampstead Road, net debt fell to GBP829.6m from GBP904.8m at 31 December 2016. This brought the loan-to-value ratio down to 16.5% based on December 2016 property valuations and interest cover for the quarter rose to 408%. The weighted average debt maturity was 7.7 years and undrawn facilities and cash totalled GBP359m. In order to reduce our proportion of fixed and hedged debt, we cancelled a GBP40m interest rate swap at a cost of GBP3.2m in March but the lower level of floating rate debt caused the weighted average interest rate payable as at 31 March 2017 to rise by 6bp to 3.71%. On an IFRS basis, the interest rate was 3.99%.

Values

Central London office values remain firm reinforced by foreign investment and despite continuing Brexit concerns. The IPD West End & Midtown Office monthly index for Q1 2017 reported office rents down 0.6% but capital values up 0.3%.

Appendices

Appendix 1: Principal lettings in 2017

 
                                                                    Min 
                                                                / fixed 
                                                                 uplift 
                                                                     at 
                                                       Total      first 
                                      Area    Rent    annual     review    Lease    Lease   Rent free 
                                        sq     GBP      rent        GBP     term    break    equivalent 
 Property            Tenant             ft     psf      GBPm        psf    Years     Year    Months 
------------------  ------------  --------  ------  --------  ---------  -------  -------  ------------ 
 Q1 
 80 Charlotte 
  Street W1          Arup          133,600   72.90    9.7(1)      81.50       20        -   33 
 White Collar 
  Factory EC1        Adobe          14,900   67.50       1.0      74.50     11.5        -   22 
 Angel Building 
  EC1                Expedia        12,500   62.50       0.8          -     13.3        -   18 
 Greencoat 
  & Gordon House 
  SW1                VCCP           12,800   55.00       0.7          -      8.5        -   13 
                                                                                            9, plus 
                                                                                             9 
 20 Farringdon                                                                               if no 
  Road EC1           Accenture      11,500   55.00       0.6          -       10        5    break 
------------------  ------------  --------  ------  --------  ---------  -------  -------  ------------ 
 Q2 
 The White 
  Chapel Building 
  E1                 Wilmington     27,000   52.00       1.4          -       10        -   20 
                                                                                            9.5, plus 
                                                                                             5 
 White Collar        Red                                                                     if no 
  Factory EC1(2)      Badger         7,700   62.50       0.5      65.60       10        5    break 
 78 Whitfield        Yoyo 
  Street W1           Wallet         4,800   63.00       0.3          -      4.5        -   8 
 78 Chamber 
  Street E1(3)       NetBooster      6,700   40.00       0.3          -       10        5   10 
------------------  ------------  --------  ------  --------  ---------  -------  -------  ------------ 
 

(1) Annual increases of 2.25% for the first 15 years (2) Low rise buildings (3) Joint venture - Derwent London share

Appendix 2: Major developments pipeline

 
 Property                         Area   Delivery     Capex     Comment 
                                    sq                  to 
                                    ft               complete 
                                                     GBPm(1) 
-------------------------  -----------  ---------  ----------  ------------------------- 
 Completed projects 
 White Collar Factory,         293,000         H1       -       276,000 sq ft 
  Old Street Yard                            2017                offices, 9,000 
  EC1                                                            sq ft retail, 
                                                                 8,000 sq ft residential 
                                                                 - 72% let overall 
 Projects on site 
                                                                87,000 sq ft 
                                                                 offices and 20,000 
 The Copyright Building,                                         sq ft retail 
  30 Berners Street                         H2                   - 81% pre-let 
  W1                           107,000     2017        24        overall 
 Brunel Building, 
  55 North Wharf Road                       H1 
  W2                           240,000     2019        99       Offices 
                                                                321,000 sq ft 
                                                                 offices, 45,000 
                                                                 sq ft residential 
                                                                 and 14,000 sq 
 80 Charlotte Street                        H2                   ft retail - 35% 
  W1                           380,000     2019        213       pre-let overall 
-------------------------  -----------  ---------  ----------  ------------------------- 
                               727,000                 336 
-------------------------  -----------  ---------  ----------  ------------------------- 
 Other major planning 
  consents 
 1 Oxford Street               275,000                          204,000 sq ft 
  W1                                                             offices, 37,000 
                                                                 sq ft retail 
                                                                 and 34,000 sq 
                                                                 ft theatre 
 Monmouth House EC1            125,000                          Offices, workspaces 
                                                                 and retail 
-------------------------  -----------  ---------  ----------  ------------------------- 
                               400,000 
-------------------------  -----------  ---------  ----------  ------------------------- 
 Planning applications 
 19-35 Baker Street         293,000(2)                          Planning application 
  W1                                                             submitted for 
                                                                 206,000 sq ft 
                                                                 offices, 52,000 
                                                                 sq ft residential 
                                                                 and 35,000 sq 
                                                                 ft retail 
-------------------------  -----------  ---------  ----------  ------------------------- 
 Grand total (excluding 
  completed projects)        1,420,000 
-------------------------  -----------  ---------  ----------  ------------------------- 
 
   (1) As at 31 December 2016     (2) Total area - Derwent London has a 55% share of the joint venture 

Appendix 3: Significant disposals 2017

 
                                             Gross       Gross             Net 
  Property             Date       Area    proceeds    proceeds           yield    Rent 
                                    sq        GBPm         GBP    to purchaser    GBPm 
                                    ft                     psf               %      pa 
-------------------  -------  --------  ----------  ----------  --------------  ------ 
 132-142 Hampstead 
  Road NW1              Q1     219,700       130.1         590             1.2     1.7 
-------------------  -------  --------  ----------  ----------  --------------  ------ 
 

Notes to editors

Derwent London plc

Derwent London plc owns a portfolio of commercial real estate predominantly in central London valued at GBP5.0 billion (including joint ventures) as at 31 December 2016, making it the largest London-focused real estate investment trust (REIT).

Our experienced team has a long track record of creating value throughout the property cycle by regenerating our buildings via development or refurbishment, effective asset management and capital recycling.

We typically acquire central London properties off-market with low capital values and modest rents in improving locations, most of which are either in the West End or the Tech Belt. We capitalise on the unique qualities of each of our properties - taking a fresh approach to the regeneration of every building with a focus on anticipating tenant requirements and an emphasis on design.

Reflecting and supporting our long-term success, the business has a strong balance sheet with modest leverage, a robust income stream and flexible financing.

Landmark schemes in our 6.0 million sq ft portfolio include Angel Building EC1, The Buckley Building EC1, White Collar Factory EC1, 1-2 Stephen Street W1, Horseferry House SW1 and Tea Building E1.

In 2017 the Group won the Property Week Developer of the Year award and was listed 12(th) out of 4,000 in the Corporate Knights Global 100 of the world's most sustainable companies. In 2016 the Group won Estates Gazette National Company of the Year and London awards as well as awards from Architects' Journal, British Council for Offices, Civic Trust and RIBA and achieved EPRA Gold for corporate and sustainability reporting.

As part of its wider sustainability programme, in 2013 Derwent London launched a dedicated GBP250,000 voluntary Community Fund and, in 2016, made a further commitment of GBP300,000 for the next three years for Fitzrovia and the Tech Belt.

The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is 25 Savile Row, London, W1S 2ER.

For further information see www.derwentlondon.com or follow us on Twitter at @derwentlondon

Forward-looking statements

This document contains certain forward-looking statements about the future outlook of Derwent London. By their nature, any statements about future outlook involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. Actual results, performance or outcomes may differ materially from any results, performance or outcomes expressed or implied by such forward-looking statements.

No representation or warranty is given in relation to any forward-looking statements made by Derwent London, including as to their completeness or accuracy. Derwent London does not undertake to update any forward-looking statements whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 11, 2017 02:00 ET (06:00 GMT)

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