Derwent says demand is strong for London properties

Derwent London said demand for its properties was strong as rental income at the real estate investment trust increased.

Lettings so far in 2019 were £17.2m on 217,000 sq ft - 6.2% higher than the estimated rental value for December 2018, the FTSE 250 company said. Vacancy rates edged down to 1.7% from 1.8%.

Derwent said it had more than 1m sq ft under construction with 64% pre-let. The sites include property in London’s Soho, Fitzrovia and Old Street districts. The company typically builds offices and retail space in developing areas of London.

John Burns, Derwent’s chief executive, said: "Demand for Derwent London's space remains strong …These lettings combined with our financial strength put the group in a very good position to pursue new opportunities."

Net debt rose by £23.8m to £980.7m in the three months to the end of March after capital spending of £48.1m. This pushed the loan-to-value ratio up to 17.5% from 17.2% at the end of 2018.

Derwent shares rose 0.4% to 3,210p at 0926 BST.