(Alliance News) - Derwent London PLC on Tuesday hiked its dividend and said its net asset value was higher following a substantial revaluation surplus.
The property investment and development company's total return for 2019 was 6.6% versus 5.3% in 2018, largely due to a GBP156.4 million revaluation surplus - representing a 3.9% rise in its underlying portfolio. Consequently, EPRA NAV rose 4.8% to 3,958 pence per share at December 31 from 3,776p the previous year.
Derwent is proposing a final dividend per share of 51.45p, 10% higher than in 2018, with the full dividend per share for the year up 10% as well at 72.45p per share from 65.85p.
Derwent also announced it has brought forward its net zero carbon target to 2030 from 2050, having signed the Better Building Partnership's climate change commitment. The company is now one of the Mayor of London's eleven "Business Climate Leaders".
In October, it signed a GBP450 million revolving credit facility, of which GBP300 million is a "green tranche" linked to the "green credentials" of projects.
Following the UK general election, Derwent said it has "a more confident outlook" for London offices "despite global uncertainties". It is guiding for "stronger" estimated recovery value growth of between 1% and 4% in 2020, rising from 2019's ERV growth figure of 1.4%. Property investment yields, Derwent said, are expected to "tighten".
Chief Executive Paul Williams said: "It has been another successful year for the group, and we start 2020 in a strong position. Due to our pre-letting successes and our positive market outlook, we aim to bring forward further projects, including our next major development at 19-35 Baker Street W1.
"Climate change presents an enormous challenge to us all, and our industry must respond. Derwent London has long recognised this; with regeneration at our heart, we have embedded sustainability into the organisation and are focussed on turning 'brown' buildings 'green'. Today we are taking our ambition to the next level bringing our net zero carbon target forward by twenty years to 2030."
Shares in Derwent London were up 2.0% at 4,308.00 pence in London on Tuesday morning.
By Anna Farley; annafarley@alliancenews.com
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Derwent London (DLN)