8th Aug 2019 09:58
(Alliance News) - Property business Derwent London PLC on Thursday hiked its dividend following a rise in first half net rental income, while it also announced sale of a office building for over GBP100 million.
In the six months to June 30, net rental income rose 7.1% year-on-year to GBP86.3 million from GBP80.6 million, attributed to recent lettings and lease renegotiations. New lettings totalled GBP18.1 million, 7.5% above the estimated rental value in December 2018, Derwent said.
The company's net asset value per share, on a European Public Real Estate basis, was up 2% to 3,852.00 pence per share at end of first half from 3,776.00p at December 2018 end.
The company raised its interim dividend by 9.9% to 21.00p per share from 19.10p and anticipates a similar growth for final dividend.
Derwent has agreed to sell the Buckley Building in Clerkenwell, London, to clients of CBRE Global Investors, a CBRE Group Inc subsidiary, for GBP103.0 million. Chief Executive Paul Williams said the sale was in line with the company's strategy of selling "mature assets".
During the half, the company completed the development of the Brunel Building in Paddington, London, and all its offices were pre-let. Derwent said Brunel will generate GBP17.2 million of net rent.
Derwent affirmed that its 80 Charlotte Street development in London is on track to be completed in the first half of 2020 with 96% of the office space in the project already pre-let.
Two other London projects, the Soho Place development and the Featherstone building will be completed during the first half 2022.
Williams said: "Our GBP18.2 million of new lettings and low vacancy rate demonstrate the continuing strength of occupier demand for Derwent London's product. The commitment to our development strategy has increased our earnings potential, and was a major contributor to our first half total return of 3.3%.
"Recent refinancing activities have further strengthened our financial position with an average debt maturity of over eight years. We believe the group is well positioned to deliver the many opportunities within its dynamic portfolio."
John Burns, the former non-executive chair, left his role in May and the company said Williams has broadened the roles of his executive team since then. Director Nigel George is now responsible for the development department. Damian Wisniewski is now the company's finance chief after previously only having a finance director role. Wisniewski has "additional strategic and operation" responsibilities, Derwent said.
Shares in Derwent were up 0.7% at 2,910.00 pence each in London on Thursday morning.
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