Derwent London breaks records in third quarter

Derwent London posted an update on its trading for the third quarter to 30 September on Thursday, saying the year-to-date had broken its own records for lettings, surpassing the full year 2015 with 495,300 square feet securing £28.3m pa of rental income.

The FTSE 250 firm said on average, lettings have been 6.9% ahead of December 2015 estimated recovery value.

It said £11.6m of lettings were in the second half, at an average level 2.8% ahead of June 2016 ERV, and its EPRA vacancy rate remained low at 3.3%.

Derwent also reported continued progress with its major development programme under construction, including 400,000 square feet due for completion by the second half of 2017, 66% of which is already pre-let.

Another 620,000 sq ft due for completion in 2019 including Brunel Building, Paddington W2

The company also reported property disposals of £135m - net of costs - for the year to date in line with December 2015 book values.

It said £130m was in the second half in line with June 2016 book values, including £90m in the fourth quarter.

At 30 September 2016, the loan-to-value ratio was 19.3%, with cash and undrawn facilities of £269m.

“We are encouraged by our letting and disposal activities since June,” said CEO John Burns.

“Despite uncertain market conditions, our brand of good quality space at mid-market rental levels continues to attract occupiers.

“Given our positive lettings and sound financial base, we are progressing our major developments in Paddington and Fitzrovia, which are both due for completion in 2019 and expected to deliver attractive returns.”