REG - Derwent London PLC - Derwent London Leasing Update

Derwent LondonAnnouncement

28/02/2023 07:16

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RNS Number : 2151R  Derwent London PLC  28 February 2023

 
 

28 February 2023

Derwent London plc ("Derwent London" / "the Group")
STRONG LEASING START TO 2023

Derwent London is pleased to announce that we have signed 10 leases since the
start of 2023 for combined rent of £14.7m. This includes the first pre-let at
25 Baker Street W1 and the third major occupier for The Featherstone Building
EC1.

 

The average lease term to break (WAULT) of these transactions is 13.4 years.
On a proforma basis our operational EPRA vacancy rate would reduce to 5.0%,
from 6.4% at December 2022.

 

Transaction details

25 Baker Street W1

PIMCO, the global investment management company, has pre-let 106,100 sq ft on
levels five to nine at our 25 Baker Street W1 on-site development (298,000 sq
ft). The rent of £11.0m equates to an average £103 psf. The lease is for a
15-year term without breaks. The project does not complete until H1 2025.

 

The project's strong sustainability credentials played an important role in
PIMCO's decision. This includes being a net zero carbon building, with a
target of BREEAM Outstanding and our first NABERS-rated building. PIMCO has an
option to expand to include level four (24,700 sq ft) which can be exercised
up to 12 months prior to practical completion. The commercial element of 25
Baker Street is now 56% pre-let/sold, excluding the pre-completion expansion
option. The courtyard retail and Gloucester Place offices have been pre-sold
to the freeholder, The Portman Estate.

 

The Featherstone Building EC1

Buro Happold, the global engineering consultancy, has leased 31,100 sq ft on
levels 5 to 8 at The Featherstone Building EC1. The rent is £2.3m or £74
psf, in line with December 2022 ERV. The lease is for 15 years with a break at
year 10 (and a break at year five on level eight).

 

Buro Happold is taking space in Old Street, recognising the role this
high-quality, net zero carbon space with our second occupier amenity DL/28.Old
Street, will have on its ability to retain and attract talent. The location
will also strengthen connectivity to its design partners and supply chain. The
building is now 59% let by area, with only three floors remaining to be
leased.

 

Paul Williams, Chief Executive of Derwent London, said:

"Over the last few months, there has been a marked increase in confidence and
occupier engagement with a busy start to the year. We have agreed £14.7m of
new rent from high quality occupiers, which includes a substantial de-risking
of 25 Baker Street two years ahead of completion. These lettings demonstrate
the importance of well-designed space with strong amenity, environmental
credentials and connectivity. There is good further occupier interest across
our portfolio."

 

Justin Phillips, Partner and London Office Director of Buro Happold, said:

"We are delighted to be taking space in The Featherstone Building, a move that
reaffirms our commitment to London. The building strongly aligns with our
environmental commitments and provides a place to express our design and
consulting capability. With growth in mind, we will design the space for and
with our employees, to foster internal and external collaboration, innovation
and to be a creative and enjoyable space."

 

Key letting terms

 Property                       Tenant        Area     Rent    Total annual rent  Lease term  Lease break  Rent free equivalent
                                              sq ft    £ psf   £m                 Years       Year         Months
 25 Baker Street W1             PIMCO         106,100  103.40  11.0               15          -            37
 The Featherstone Building EC1  Buro Happold  31,100   74.40   2.3                15          10(1)        24, plus 12 if no break
 Other                                        25,400   53.90   1.4                -           -
 2023 YTD                                     162,600  90.10   14.7               -           -

(1) There is an additional break at year five on level eight subject to a
12-month rent penalty payable by the tenant

 

For further information, please contact:

 

 Derwent London             Paul Williams, Chief Executive

 Tel: +44 (0)20 7659 3000   Emily Prideaux, Executive Director

                            Robert Duncan, Head of Investor Relations

 Brunswick Group            Nina Coad

 Tel: +44 (0)20 7404 5959   Emily Trapnell

 

 

Notes to editors

Derwent London plc

Derwent London plc owns 70 buildings in a commercial real estate portfolio
predominantly in central London valued at £5.4 billion as at 31 December
2022, making it the largest London-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 development 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.

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. In 2019 the Group
became the first UK REIT to sign a Revolving Credit Facility with a 'green'
tranche. At the same time, we also launched our Green Finance Framework and
signed the Better Buildings Partnership's climate change commitment. The Group
is a member of the 'RE100' which recognises Derwent London as an influential
company, committed to 100% renewable power by purchasing renewable energy, a
key step in becoming a net zero carbon business. Derwent London has
science-based carbon targets validated by the Science Based Targets initiative
(SBTi).

Landmark buildings in our 5.5 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.

In January 2022 we were proud to announce that we had achieved the National
Equality Standard - the UK's highest benchmark for equality, diversity and
inclusion. In October 2022, 80 Charlotte Street won the BCO's Best National
Commercial Workplace award 2022. In October 2021, the Group won EG's UK
Company of the Year award and in January 2022 came top of the Property Sector
and 38th position overall in Management Today's Britain's Most Admired
Companies awards 2021. In 2013 the Company launched a voluntary Community Fund
which has to date supported over 150 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 Twitter at @derwentlondon

 

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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