Derwent on the hunt for at least one big buy
The present that Derwent London chief executive Paul Williams wants most for the business, as it celebrates its 40th year, is at least one new addition to its property portfolio.
With UK commercial real estate market now stabilising, Williams says the deals market is starting to open up.
“The first cut in the interest rate has been good and what is interesting is that over the last few weeks we have been seeing three of four different assets being put on the market at sensible prices,” Williams told EG. “With our balance sheet where it is, I think we would like to buy if we could.”
The present that Derwent London chief executive Paul Williams wants most for the business, as it celebrates its 40th year, is at least one new addition to its property portfolio.
With UK commercial real estate market now stabilising, Williams says the deals market is starting to open up.
“The first cut in the interest rate has been good and what is interesting is that over the last few weeks we have been seeing three of four different assets being put on the market at sensible prices,” Williams told EG. “With our balance sheet where it is, I think we would like to buy if we could.”
Derwent, which today announced its results for the six months ended 30 June has some £566m of cash and undrawn debt in the business and Williams seems eager to spend some of it.
Cash will be invested into the group’s development portfolio, where it has some 437,000 sq ft of on-site projects, including the 298,000 sq ft 25 Baker Street, W1, and 139,000 sq ft Network building in Fitzrovia, also W1, and future pipeline of some 1.3m sq ft.
But Williams is keen to put the company’s balance sheet to work and seize the opportunities that he believes the market is now offering.
Chief on his shopping list will be an asset of “reasonable scale” in its core target area of central London. If Derwent is going to invest time and effort as well as money, the buildings need to big enough to make it worth its while.
Williams also wants something with some short-term income so it has space and time to work up plans to redevelop the project, which must have capacity for a little extra floor space to be added.
Most importantly though, said Williams, it has to be the kind of building that it can turn into a “really great Derwent product”.
“We always want something that is under-loved so we can add our love and skills to make it really good,” said Williams. “To turn it into a silk purse.”
Looking forward Williams said he was “very positive” about the second half of 2024 and hopes to have bought something by the time the firm reports its full year results in February.
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