MORNING NEWS: Derwent eyes opportunities as ERVs grow

Good morning. Here’s your daily round-up of the latest news and views from EG and a collection of industry-relevant headlines from the nationals, all perfectly curated to set you up for the day ahead. Derwent London boss Paul Williams is toasting more than just the business’s 40th anniversary as the firm this morning reports its strongest rental growth since 2016. Chief executive Williams said the pace of rental growth of the best office assets in the right locations had accelerated in H1. “We have delivered another strong leasing performance, agreeing £8.8m of new rent in H1 with open-market lettings more than 10% above the December 2023 ERV,” said Williams. “This more positive backdrop fed through into the strongest ERV growth since 2016, giving us confidence to upgrade our 2024 rental guidance to 3% to 6%.” He added: “With our strong balance sheet and 40-year track record, we have the capacity and ambition to accelerate our growth plans and are exploring a number of opportunities while also continuing to build out our substantial pipeline. Combined with rising rents, we expect to deliver increasingly attractive total returns over the coming years.” Savills chief executive Mark Ridley added further optimism to the market as the agent reported half-year turnover of just over a £1bn and strong growth in its transaction advisory business. “Our improved performance in the first half reflects the positive effects of early recovery phases in a number of our markets, as well as the robust and growing earnings provided by our less transactional businesses,” said Ridley. “While we have seen resilience in prime commercial leasing markets, global capital transaction volumes remain subdued, although activity is recovering in certain markets.” While Q2 figures from Brookfield show real estate accounts for just over a quarter of its now almost $1tn of assets under management at $268bn, the investment giant appears to be back on the hunt for opportunities in the sector. It has some $12bn of unspent commitments within its real estate business and chief executive Bruce Flatt reckons there are some “tremendous opportunities” out there. “High-quality, best-in-class assets continue to attract very robust bids and significant demand, and we will continue to play into that as we have in recent quarters. But I would say that monetisation activity in real estate will be more asset-specific than broad-based,” he said. “That is quite representative of the opportunity we see on the investment side, where we are seeing tremendous opportunities to put capital to work on the real estate side and where there is still some caution in the sector.” Elsewhere, nuclear specialist Urenco has signed a 10-year lease to occupy 25,186 sq ft in Paddington, W2. It has let the sixth floor of Paddington Square at 128-142, Praed Street, W2, at an achieved rent of £85.50 per sq ft or £2.1m per annum. It will take occupation next month. Justin Brand, asset director for Great Western Developments, said: “We have seen strong interest as office tenants realise the potential in Paddington Square as one the best-designed and best-connected office locations in London with direct  access to central London, via five Tube lines including the Elizabeth Line, Heathrow and the rest of the UK with direct Tube access to all of London’s mainline stations.” All of the news from EG, plus a selection of headlines from the nationals: High demand boosts Impact Healthcare REIT’s portfolio and rentsAssura buys £500m healthcare portfolioTransaction advisory leads growth as Savills revenue tops £1bnDerwent upgrades guidance as market strengthensNuclear expert plots global HQ at Paddington SquareBrookfield sees ‘tremendous opportunities’ as AUM nears $1tnRICS sees private resi rent rise on the horizonCOMMENT: An architect’s view on Labour’s life sciences planRegal unveils 1,100 home North Finchley plansBensons for Beds snaps up Carpetright portfolioGPA gets the nod for Darlington government hubSavills finds new flex home at Cubo’s Standard CourtAvant gets green light for £29m housing scheme near NottinghamFuller’s toasts deal for seven Lovely pubsCIT scores hat-trick at HyloCOMMENT: Far right riots: thoughts, guidance and more from PREACH InclusionEdinburgh office rents grow at fastest rate in a decadeCLS posts rental growth of 6% in H1 resultsOutlook improves across global real estate marketBlacklight secures £33m loan to refinance Liverpool PBSAWestminster planners approve 240,000 sq ft Baker Street schemeVistry secures £19m deal for Midlands later living homesPlans in for 1,435-home Newton Aycliffe developmentAT Communications triples space at SEGRO Park North FelthamBoohoo puts London office up for sale amid turnaround troubles (£)UK shops shut over fears of more violence (£)UK post-pandemic growth higher than previously estimated, ONS says (£)