REG - Derwent London PLC - Acquisition

Derwent LondonAnnouncement

03/12/2024 07:00

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RNS Number : 5001O  Derwent London PLC  03 December 2024

 

3 December 2024

Derwent London plc ("Derwent London" / "the Group")
Acquisition of remaining 50% in 50 Baker Street W1 scheme

Derwent London is pleased to announce that it has acquired the remaining 50%
stake in its proposed 50 Baker Street W1 scheme from Lazari Investments, its
joint venture partner, for £44.4m (£370 psf on consented floor area). This
reflects a 4.2% net initial yield at the current passing income of £2.0m pa
(based on 50%). Resolution to grant planning consent for a c.240,000 sq ft
office-led scheme, which is nearly double the existing floor area, was
received in August 2024. Detailed design work is underway.

 

The decision to acquire full control of 50 Baker Street was taken following
the pre-letting success at our adjacent 25 Baker Street W1 project and
reflects our ongoing confidence in the strength of the West End occupational
market. Good progress is being made on a regear of the headleases with The
Portman Estate, our freeholder and the owner of 64 Baker Street, to facilitate
delivery of this exciting project. This follows our previous regear in 2021
with The Portman Estate at 25 Baker Street. We expect the scheme to deliver an
attractive return in line with our current on-site projects.

 

Paul Williams, Chief Executive of Derwent London, said:

"West End vacancy remains low and demand from high quality occupiers across a
broad range of business sectors continues to outpace supply. Underpinned by
our confidence that the property cycle has inflected, we believe now is the
time to acquire well-located regeneration opportunities. Our decision to take
full ownership of 50 Baker Street reflects this and marks the conclusion of a
successful partnership with Lazari. We look forward to progressing the project
to the next stage, with works expected to commence on site in H1 2026."

 

Nicholas Lazari, Director of Lazari Investments, said:

"The sale of our 50% interest in 50 Baker Street marks the culmination of a
successful partnership with Derwent London. Following receipt of the
resolution to grant planning in August and having made good progress on the
regear with The Portman Estate, we feel the time is right to capitalise on our
efforts. The cash proceeds from the sale ensures that the equity requirements
for our exciting and extensive West End development pipeline are now fully
funded and puts us in a strong position to realise opportunities that may
arise."

 

 

For further information, please contact:

 

 Derwent London                             Paul Williams, Chief Executive

 Tel: +44 (0)20 3478 4217 (Robert Duncan)   Richard Dean, Director of Investment

                                            Robert Duncan, Head of Investor Relations

 Brunswick Group                            Nina Coad

 Tel: +44 (0)20 7404 5959                   Peter Hesse

 

 

Notes to editors

Derwent London plc

Derwent London plc owns 63 buildings in a commercial real estate portfolio
predominantly in central London valued at £4.8 billion as at 30 June 2024,
making it the largest London office-focused real estate investment trust
(REIT).

Our experienced team has a long track record of creating value throughout the
property cycle by regenerating our buildings via redevelopment or
refurbishment, effective asset management and capital recycling. We typically
acquire central London properties off-market with low capital values and
modest rents in improving locations, most of which are either in the West End
or the Tech Belt. We capitalise on the unique qualities of each of our
properties - taking a fresh approach to the regeneration of every building
with a focus on anticipating tenant requirements and an emphasis on design.
Reflecting and supporting our long-term success, the business has a strong
balance sheet with modest leverage, a robust income stream and flexible
financing.

We are frequently recognised in industry awards for the quality, design and
innovation of our projects. Landmark buildings in our 5.3 million sq ft
portfolio include 1 Soho Place W1, 80 Charlotte Street W1, Brunel Building W2,
White Collar Factory EC1, Angel Building EC1, 1-2 Stephen Street W1,
Horseferry House SW1 and Tea Building E1.

As part of our commitment to lead the industry in mitigating climate change,
Derwent London has committed to becoming a net zero carbon business by 2030,
publishing its pathway to achieving this goal in July 2020. Our science-based
carbon targets validated by the Science Based Targets initiative (SBTi). In
2013 the Company launched a voluntary Community Fund which has to date
supported over 160 community projects in the West End and the Tech Belt.

The Company is a public limited company, which is listed on the London Stock
Exchange and incorporated and domiciled in the UK. The address of its
registered office is 25 Savile Row, London, W1S 2ER.

For further information see www.derwentlondon.com
(http://www.derwentlondon.com) or follow us on LinkedIn
(https://www.linkedin.com/company/derwentlondon/?viewAsMember=true)

 

 

Forward-looking statements

This document contains certain forward-looking statements about the future
outlook of Derwent London. By their nature, any statements about future
outlook involve risk and uncertainty because they relate to events and depend
on circumstances that may or may not occur in the future. Actual results,
performance or outcomes may differ materially from any results, performance or
outcomes expressed or implied by such forward-looking statements.

No representation or warranty is given in relation to any forward-looking
statements made by Derwent London, including as to their completeness or
accuracy. Derwent London does not undertake to update any forward-looking
statements whether as a result of new information, future events or otherwise.
Nothing in this announcement should be construed as a profit forecast.

 

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