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(Alliance News) - Derwent London PLC on Thursday reported an addition to its medium-term development pipeline amid growing leasing demand.
The London-based property investment and development business reported new leases totalling GBP5.5 million on 95,000 square feet achieved in the three months to September 30.
The leases were signed at an average of 2.4% above December 2020 estimated rental value. They take lettings in the year so far to GBP9.4 million on 174,200 square feet at 0.7% above estimated rental value. Derwent London said it has a further GBP3.3 million of rent under offer.
"Improved market sentiment and higher levels of business activity have led to increased leasing demand," said Chief Executive Paul Williams.
"Our strong relationships and financial position have enabled us to secure off-market investment opportunities, such as 230 Blackfriars Road, enhancing our medium-term development pipeline," added Williams.
Derwent London on Thursday reported that it has exchanged contracts to acquire the 100-year leasehold interest in Conoco House and Quadrant House at 230 Blackfriars Road in Southwark, south London for GBP55.0 million before costs. The ground rent is a fixed GBP5,000 per annum.
Conoco House is multi-let at a passing rent of GBP2.1 million, with all leases expiring in 2025 and with tenant breaks in 2023. The net initial yield is 3.5% which would rise to 4.2% on letting the 9,400 square feet of vacant space.
The adjoining Quadrant House is a 36-unit residential building let to 2074 at a nominal rent.
Derwent said that together the two properties occupy a 0.8 acre site that has medium-term potential for an office-led development.
Derwent London shares were trading 1.8% higher in London on Thursday morning at 3,421.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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