Real-estate investment trust Derwent London has shrugged off gloomy market conditions, reporting more lettings success in the first half of 2008 than in the whole of 2007.
Gross rental income rose 13.9 per cent in the period to £57.5m, with 39 new lettings signed - that generated a combined annual rent of £11m. Almost three-quarters comprised pre-lets at developments under construction, including a 139,000 sq ft letting to Cancer Research at Islington's Angel Centre. "We have a good idea of what businesses want - well-designed space at good value prices," explains chief executive John Burns.
The group's central London assets (94 per cent of the portfolio) fell in value by just 5.8 per cent, compared to an 8.2 per cent fall for the equivalent IPD benchmark. This partly reflects a low average rent of £27 per square foot, which is gradually being boosted by rent reviews and refurbishments. Derwent also won three major planning consents in the period, and sold £56m of non-core assets above book value. An exceptional £8.3m charge for a lease surrender at Belgravia's Grosvenor Place will also pave the way for its future redevelopment.
Broker Lehman Brothers forecasts full-year net asset value of 1,496p.
| Derwent London (DLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,138p | MARKET VALUE: | £1.15bn | |
| TOUCH: | 1136-1138p | 12M HIGH: | 1,860p | LOW: 930p |
| DIVIDEND YIELD: | 2.0% | TRADING STOCK: | £8.4m | |
| DISCOUNT TO NAV: | 32% | |||
| INVEST PROPERTIES: | £2.5bn | NET DEBT: | 50% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 1922 | -76.3 | 158 | 7.50 |
| 2008 | 1669 | -145 | -138 | 8.15 |
| % change | -13 | - | - | +9 |
Ex-div: 1 Oct Payment: 10 Nov | ||||
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