Derwent London is “firing on all cylinders” as it reveals a 15.4% hike in its net asset value to 1,701p in its full-year results.
The central London REIT said its strong NAV increase – up from 1,474p at the end of December 2010 – was driven by a £172.1m revaluation movement which came mainly from rental growth.
Its property valuation rose 7.6% to £2.6bn, driven by estimated rental value growth of 6.3% and a 16bp yield compression across the portfolio.
Derwent’s West End assets rose 8.1%, City border by 7.1% and Scotland by 1.5%.
The portfolio is valued at a 4.4% net initial yield.
The group had a record year for lettings, signing 100 new deals in 2011 totalling 495,000 sq ft at £16.7m pa. Its vacancy rate at 31 December 2011 was 1.3% – down significantly from 5.9% a year earlier.
It made good progress on developments, with 500,000 sq ft across seven projects “on site or due to commence” in 2012 and updated the market on its joint venture with Grosvenor to bring forward a luxury hotel, office and residential scheme at Hyde Park Corner.
Sales during the period were completed at 38% above book value. Disposals included Riverwalk House, which was sold to Ronson Capital Partners. It invested £87.5m during the period.
The group’s LTV stands at 32%, compared with 35.7% a year earlier. Net debt fell to £864.5m, with available facilities of £469m at the year end.
Its full-year dividend has increased to 21.9p, giving a total of 31.35p, up 8.1% on 2010.
Chairman Robert Rayne said: “Derwent London has proven again that the strategy of focusing on mid-market central London property is successful. We have increased and extended our debt facilities to provide us with the firepower and flexibility to exploit the opportunities open to us. We are confident that the group is well positioned to deliver good returns both in the tough environment we currently face, and when more sustained economic growth appears.”
Chief executive John Burns said: “2011 has been another strong year for Derwent London. The robust leasing activity we experienced in the first half of the year has continued throughout 2011 and into 2012 and we are confident that the quality and distinctive space in our portfolio will continue to attract a diverse mix of tenants.
“We have made significant progress in unlocking the potential value at a number of our projects, and look forward to advancing our exciting pipeline. The positive regenerative impact of Crossrail is increasingly apparent in our villages close to Tottenham Court Road and Farringdon.”
bridget.o’connell@estatesgazette.com
