Derwent rents improve as Baker Street goes ahead

Derwent London said rent collections had improved as it commissioned designers to start work on a major project in London's Baker Street.

The property investor and developer said office rent collections for the September quarter had risen to 89% from 83% in mid-October and total rent collection had improved to 86% from 80%.

Derwent has extended £16m of leases since June with another £5m under offer. It has agreed £4.6m of new lettings in 2020 covering 101,000 sq ft. The FTSE 250 company's shares rose 1.9% to £28.14 at 10:41 GMT.

Commercial property owners have missed out on rent during the Covid-19 crisis as tenants have struggled to pay during lockdowns. Derwent said it was working with tenants as England entered a second phase of restrictions to stem the spread of the virus.

Derwent has two major projects under construction: Soho Place, due to be completed in the first half of 2022, and 19-35 Baker Street with a completion date of 2025. The company said it had committed £14m for the detailed design of the Baker Street site with construction scheduled to start in the second half of 2021.

Paul Williams, Derwent's chief executive, said: "As we enter a second national lockdown in response to the global Covid-19 pandemic, we continue to work closely with our occupiers, business partners and communities. The significant operational progress made in the third quarter and the group's strong financial position give us the confidence to commit to our next major development at 19-35 Baker Street."

Derwent said it signed a five-year £100m unsecured revolving credit facility with Wells Fargo. It had a loan-to-value ratio of 17.3% at the end of September wtih £495m of undrawn facilities and cash.