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Yup it is undervalued but I spent too many of my hours left on earth with all the jobsworth/HSE/DLUCH bods listening to all the legislations and moans post Grenfell that every single building above 11 metres, (from road level to the floor level of the top floor! ) even worse , if a building is above 18 metres / 7 floors in England, has to comply with going forward… for sure Derwent/ Grainger etc are going to be caught up in this waste of oxygen exercise…absolute disaster…DLUCH have no idea how many buildings are going to be caught up with petty-fogging legislation. For all you homeowners out there who live in converted houses, mansion blocks, be very afraid, the jobsworths/ managing agents have a licence to rob you. Derwent plus Grainger are going to be hit by excessive costs of compliance , and the legislation has changed to put the onus on the landowners rather than the lessees, unless there is cunning wording In the leases…which may or not help depending on it being tested in court….joy!
UNDERVALUED FOR a reason…
This is great undervalued share at the moment. Derwent London own and are constantly developing a huge property portfolio.
Derwent London benefits from office property boom: London-focused real estate investment trust Derwent London reported a strong set of first-half numbers that beat expectations last week. The FTSE 250-listed company, which has the majority of its property located in the West End of the capital, said the valuation of the portfolio had increased by more than £300 million, or 10%, in the first six months of the year, to £3.74 billion at June 30. The property sector as a whole was given a boost last week when Mark Carney, Governor of the Bank of England, hinted that U.K. interest rates will stay lower for longer. Rental values increased by 4.2% during the first half and the portfolio yields 5.02%. The net debt of £974 million at the end of June has an average maturity of 7.2 years and a weighted average interest rate of 3.98%. John Burns, Chief Executive, said: “Derwent London is set to have another good year in 2014 after an excellent first half. Our confidence in our market, the quality of our brand and our strong financial position is reflected in the group’s most substantial development programme to date.” The company has 626,000 sq ft of space under construction of which almost a third is pre-let. Shares in Derwent London have enjoyed a strong year so far, up almost 14%, and easily beating the wider FTSE 250 that has fallen 1% during the same period. The performance follows a stellar five-year period during which the shares have more than tripled in value from lows of about £8 in early 2009. The shares now trade on a forecast price earnings ratio of 48 times, falling to 41 times next year, and offer a prospective dividend yield of 1.5%. Derwent is in a strong position, but Questor would argue that property moves in cycles and would be wary about getting in at the top of this one. Derwent London at £28.21 Questor Says “Hold”.
Derwent London: Deutsche Bank raises target from 2,300p to 2,650p.
Derwent London: Exane BNP Paribas upgrades to neutral, target lifted from 1,950p to 2,040p.
Derwent London: JP Morgan upgrades to overweight, target lifted from 2,000p to 2,300p.
DERWENT GETS BOOST FROM LONDON'S 'SAFE HAVEN' STATUS London is enjoying “safe haven” status among investors according to FTSE 250 property company Derwent London. The company, which specialises in offices in London’s West End and the borders of the City, said the eurozone crisis had driven more investment to the capital. London office transactions totalled £7.2bn in the first half of the year – the most over a six-month period since the second half of 2007. John Burns, Derwent’s chief executive, said: “London has become increasingly polarised from the rest of the country. Overseas investors are very much wanting to put money here.” The value of Derwent’s property portfolio rose 3.3pc in the first half of the year, with rents up 2.8pc. The company has secured a pre-let to Burberry in the largest letting in the West End this year so far. Just 1.1pc of Derwent’s space is vacant. Mr Burns said there was reasonable “pent-up demand” for West End office space against a backdrop of little development. He said the company was feeling positive about the second half: “We’re getting all our rents in on time. We’re getting the signals. You get a feeling.” Mr Burns said the company was expecting to be in a “low interest rate environment” over the next five years. He said there was unlikely to be a “tremendous spike” in rents. The interim dividend, payable on November 1, rose from 9.45p to 9.95p a share. Source: http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/9493634/London-safe-haven-aids-Derwent.html P.S. Here's some links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=256596 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
UBS lifted target from 1,750p to 2,000p, neutral rating kept
The loan provides further diversification of funding sources for Derwent London. It also reduces the proportion of total loans that the company is borrowing from banks to around 50%. At the beginning of 2011, the equivalent percentage was 80%. As a new long-dated loan it also increases the weighted average unexpired term of drawn debt to around 6.6 years. The loan is secured on two wholly-owned properties in Fitzrovia within London's West End.
Derwent London, a FTSE 250 property firm, has signed a new 12-year secured debt facility with Cornerstone Real Estate Advisers to provide long-term fixed rate debt at a rate of 3.99 per cent until to July 2024. The facility is for £83m, with the fixed rate equivalent to the gilt rate plus 210 basis points. It completes the refinancing of £575m of Derwent London group facilities that were due to expire in 2013. The initial loan-to-value ratio is 48% and the covenant is set at 70%. The facility was fully drawn on August 1st and has been used to replace the remaining part of the LMS syndicated loan facility which was reduced to £150m in January 2012 and of which £95m was drawn. Damian Wisniewski, Derwent London's Finance Director, said: "This new long-term, fixed rate loan provides a diversified source of funding for Derwent London at a modest all-in interest rate, taking advantage of the recent falls in gilt rates. It also enhances our debt maturity profile and adds an important name to our established pool of lenders."
John Burns, Chief Executive Officer at Derwent London, said: "This acquisition increases our presence to over 570,000 sq ft in Victoria, an improving West End village which is diversifying from its traditional occupier base and attracting a wide range of creative companies. It will provide us with immediate incremental income, and consolidates our existing holdings within the same block which will increase the longer term options available to us." The firm was also keen to point out that rents in the adjoining Greencoat & Gordon House have achieved in excess of £50 per sq ft, pointing to the potential for rental growth.
Derwent London, a FTSE 250 property firm, has acquired Francis House, a freehold office building in south west London covering 57,000 square feet. The £29.1m property adjoins the company's existing holdings at Greencoat & Gordon House and 6-8 Greencoat Place. The building is let to Channel Four Television under a lease expiring in February 2020. The total annual income is £1.56m until February 2015, when there is a fixed rent increase to £1.66m per annum, reflecting a net initial yield of 5.1%, rising to 5.4%. Part of the ground floor together with the upper floors, which comprise 42,600 square feet (sq ft), equivalent to 3,960 square metres, of office space, are let off a low average rent of £36.65 per sq ft. In addition, there is storage space on the rest of the ground floor and the basement totalling 14,400 sq ft (1,340m2) which is under-let to House of Fraser at a nominal rent until January 2054
Societe Generale downgrades Derwent London from hold to sell, target price 1660p
Merrill Lynch reiterates underperform on Derwent London, target price raised from 1570p to 1735p
Derwent London issued an encouraging update yesterday, with the property group’s chief executive, John Burns, confirming that the central London office market had continued to “perform strongly” over the first quarter. Panmure Gordon puts the stock on a 13 per cent premium to net asset values, which makes the Independent cautious. There is no reason to sell. But it would wait for a better time to buy. Hold, it recommends.
Panmure Gordon retained its "hold" recommendation for Derwent London (DLN), the commercial property investor, with an increased target price of 1,600p, up from 1,505p. Commenting on full-year results, the broker said they exceeded its forecasts at the adjusted pre-tax and net asset value levels. This, it added, makes the group an "undoubtedly" high quality play for investors looking to access the central London market. However, with the shares trading on a 14% premium to the broker's upgraded 2011 net asset value forecast, Panmure thinks some of the out-performance has already been priced in. Derwent shares declined 32.5p to 1,700.5p.