Strong lettings and increased rental income have given Derwent London cause to celebrate despite falling values.
It let 228,000 sq ft during H1, worth £19.3m in rent, with highlights including PIMCO signing for 106,000 sq ft at 25 Baker Street, W1. In addition, it has let a further 81,200 sq ft so far for H2, worth £7m. The year-to-date average is 8.3% above December 2022.
Derwent also announced a 50,000 sq ft letting at 25 Baker Street to Moelis on a 15-year term. Alongside this a tech company has leased 14,000 sq ft at the Featherstone Building, EC1, for a term of 10 years, with a tenant break at year five. Together the deals are worth £7m pa in rent.
Gross rental income of £105.9m was up 3.9% from £101.9m (restated) in H1 2022
EPRA earnings were down 7%, at £55.6m, or 49.5p per share, as the company made an IFRS loss before tax of £143.1m, down from a profit of £137.1m in H1 2022. The total return swung from 3% last year to -3.7%.
Much of this was driven by valuation shifts, with the central London-focused portfolio falling in value by 3.7% in H1, taking the overall decline to 11.4% from H1 2022.
Chief executive Paul Williams said: “We delivered our second highest H1 lettings on record with momentum maintained into the second half as businesses continue to commit to our distinctive central London buildings and brand. With our strong balance sheet, we are well-positioned with the right product and pipeline to capture London’s diverse demand, despite the uncertain economic outlook.”
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