Derwent in expansive mood after £103m office sale
Derwent London has exchanged contracts on the £103m sale of the Buckley Building, EC1.
The freehold of the 85,100 sq ft multilet office building, located on Clerkenwell Green, is being bought by a client of CBRE Global Investors. The sale price, after “rental top-ups and costs”, was 4.8% above the December 2018 book value.
The transaction brings the developer’s total sales so far this year to nearly £200m.
Derwent London has exchanged contracts on the £103m sale of the Buckley Building, EC1.
The freehold of the 85,100 sq ft multilet office building, located on Clerkenwell Green, is being bought by a client of CBRE Global Investors. The sale price, after “rental top-ups and costs”, was 4.8% above the December 2018 book value.
The transaction brings the developer’s total sales so far this year to nearly £200m.
Chief executive Paul Williams said the firm is now well placed to make new acquisitions. “We always had a view that we would like to sell something like £200m this year to match the investment we’re making into our development pipeline. That’s what we’ve achieved. We would like to have a balanced portfolio of income and opportunity.
“The message here is that we’d like to try and buy. Given the strength of tenant demand, we’d like to add to the portfolio. We don’t need to, as we’ve got a lot of opportunities from within, but if something interesting came along, we’d have a look at it.”
The firm has not bought much property since 2015, when it acquired Aldgate Union, an office block in Whitechapel, from the Royal Bank of Scotland for £132m before costs.
Derwent London also announced steady H1 results this week, with its EPRA NAV nudging up by 3.7% compared with H1 2018.
Its EPRA NAV per share stands at £38.52, a 2% increase since December 2018, when it was valued at £37.76.
Net rental income increased by 7.1% compared with H1 2018, and stands at £86.3m.
The value of its portfolio also increased by 1.9% to £5.4bn.
New lettings totalled £18.1m, which marks a 7.5% increase in estimated rental value.
Williams said: “Our £18m of new lettings and low vacancy rate demonstrate the continuing strength of occupier demand for Derwent London’s product.
“The commitment to our development strategy has increased our earnings potential, and was a major contributor to our first-half total return of 3.3%.
“Recent refinancing activities have further strengthened our financial position, with an average debt maturity of over eight years. We believe the group is well positioned to deliver the many opportunities within its dynamic portfolio.”
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