A resilient London office market has helped central London developer Derwent London deliver a 4.6% increase in NAV to 3,716 p per share and propose a special dividend in its 2017 full-year results.
Derwent’s chairman, Robbie Rayne, said: “We have had an exceptional year for lettings, increased EPRA earnings by 22.5%, achieved a total return of 7.7% and further improved our strong financial position.
“We continue to see attractive returns from investing in our pipeline and are proposing a 10.1% increase in the final dividend plus a special dividend of 75p per share.”
During the period its net rental income increased by 10.4% to £161.1m from £145.9m.
On the operational side the company achieved record new lettings totalling £41.5m on average, which is 1.3% above the December 2016 total.
Investment property disposals totalled £482.8m, 11.8% above December 2016 values, and it achieved capital expenditure of £165m in 2017 including capitalised interest of £9.4m.
Its development portfolio comprises 623,000 sq ft under construction for delivery in 2019. Some 45% of these projects are have been prelet.
Derwent posted capital expenditure of £265m to complete major year-end projects with a potential surplus of around £140m still to come on the two developments for delivery in 2019. Work also now started at Soho Place W1, above the new Crossrail station.
Its portfolio also increased in value to £4.9bn, an underlying portfolio valuation increase of 3.9%.
Chief executive John Burns said: “The London office market continues to be resilient with good occupier and investment demand.
“Our highly successful White Collar Factory development demonstrates Derwent London’s innovative approach. We have largely prelet the office element at 80 Charlotte Street and are seeing good interest in our Brunel Building. We have now started work at Soho Place, one of London’s most important Crossrail sites.”
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