Derwent London proposes special dividend as NAV rises

Derwent London proposed a special dividend on Tuesday as it posted a rise in 2017 net asset value.

In the year to the end of December 2017, net rental income increased 10.4% to £161.1m, while EPRA net asset value per share was up 4.6% to 3,716p from 3,551p at 31 December 2016.

EPRA earnings rose 22.5% to £105m, while earnings per share increased 22.4% to 94.2p. The company lifted its final dividend 10% to 42.4p, giving a full-year dividend of 59.73p, up 14.1% on the year. In addition, it proposed a special dividend of 75p per share to be paid this June.

The company achieved a record for new lettings, of £41.5m, while investment property disposals totalled £482.8m, up 11.8% from December 2016 values.

Derwent said the London office market remained resilient in 2017 as both occupier and investor demand was strong. It said that while leasing incentives have increased in some instances and deals take longer to complete, prices remain firm.

In the longer term, demand will depend on the continuing strength of the London economy, the impact of the UK's final Brexit settlement and what actions the country subsequently takes, it said.

Chief executive John Burns said: "The London office market continues to be resilient with good occupier and investment demand. Our highly successful White Collar Factory development demonstrates Derwent London's innovative approach.

"We have largely pre-let the office element at 80 Charlotte Street and are seeing good interest in our Brunel Building. We have now started work at Soho Place, one of London's most important Crossrail sites."

At 0900 GMT, the shares were up 2.8% to 2,990p.