Central London office developer Derwent London reported a 4.8% jump in net asset value (NAV) in impressive full year results.
The group’s EPRA NAV per share was 3,958p at the end of December, up from 3,776p a year earlier.
Net rental income rose 10.5% to £178m, and the London office landlord and developer produced a total return of 6.6%, up from 5.3% in 2018.
Underlying earnings rose 4% to £115m, equating to 103.1p per share, and the group’s full year dividend grew 10% to 72.45p.
Net debt increased slightly to £981.6m, while it has undrawn facilities and cash of £511m at the end of 2019, up from £274m a year earlier. Its loan-to-value stands at 16.9%.
Highlights during the year include a 3.9% increase in the value of its portfolio to £5.5bn. It completed almost 500,000 sq ft of new lettings in the year, producing £34m of annual rent at 6.9% above estimated rental value (ERV).
It made £181.7m worth of disposals in the year, 6.1% above book value, and is currently on-site with three developments – 72% of which is pre-let.
The group said it expects stronger ERV growth for 2020 of between 1% and 4% in the London office market, which it said “encourages us to bring forward further projects”. One such project is 19-35 Baker Street (the computer generate image of the finished building is pictured) in London’s West End.
“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,” chief executive Paul Williams said.
The company also announced it has brought forward its net zero carbon target by 20 years to 2030, leading the way in the property sector.
The group became one of the Mayor of London’s 11 Business Climate Leaders last year, and has committed £300m of its recent £450m revolving credit facility to green projects.
Williams added: “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, aligned with COP21’s 1.5°C climate scenario.”
DLN : Derwent London reports 4.8% jump in NAV