10th Aug 2021 10:25
(Alliance News) - Derwent London PLC on Tuesday raised its guidance for the rental value of its properties and unveiled new acquisitions and a joint venture, as workers start going back to offices.
Derwent is a FTSE 250-listed real estate investment trust focused on central London offices. Its net tangible assets per share increased 1.4% in the first half, to 3,864p from 3,812p. Pretax profit was GBP121.1 million, versus a loss of GBP14.0 million a year ago.
Shares were up 1.8% to 3,778.00 pence in London on Tuesday morning.
The company declared an interim dividend per share of 23.0p, up from 22.0p a year ago.
Derwent said business confidence was stronger than expected thanks to vaccines and lockdown easing, with office rent collection increasing to near pre-Covid levels. The pandemic highlighted the importance of sustainability and wellbeing in offices, the company added.
As a result, Derwent raised its growth forecast for estimated rental value to between -2.0% and 2.0%. The previous guidance was for between -5.0% and 0%.
Separately, Derwent announced it has bought two properties totalling 182,100 square feet for GBP214.6 million in the "Knowledge Quarter" around University College London. They have a combined rent of GBP5.3 million per year, a net initial yield of 2.5%.
The company also formed a joint venture with Lazari Investments, which is expected to buy three properties on Baker Street capable of significant redevelopment. The properties are worth GBP5.2 million per year in rent and have an initial yield of 4.0%. Derwent owns 50% of the venture.
"Sentiment is improving as the year progresses which has been reflected in our results and encouraged us to raise our ERV guidance. We are well positioned to invest and are moving forward with our next phase of net zero carbon developments and today's acquisitions have added to our extensive pipeline," Chief Executive Paul Williams said.
By Ivan Edwards; [email protected]
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