Derwent commits to new London schemes despite Brexit concerns

The property developer Derwent London is to push ahead with two new office schemes after a bumper first half for lettings despite the shadow of a potential no-deal Brexit looming over the property market.

The group, which owns £5.4bn of real estate, said it had committed to new developments at Soho Place above Tottenham Court Road station and the Featherstone Building in Shoreditch after achieving £18.1m of new leasing deals in the six months to June, ahead of last year’s figure. 

The company said: “The central London office market remains stable with low rental and capital growth, while levels of letting and investment activity are below the high levels of the past few years. 

“However, as our own performance shows, there continues to be a sufficient number of transactions which support current rents and yields.” 

Pre-tax profit for the first half was down 3 per cent to £130m from a year earlier because of higher finance-related costs such as a bond redemption premium, but net asset value rose 2 per cent during the six months to 3,852p a share, the company said. 

It said it had agreed to sell another building in Farringdon for £103m, 4.8 per cent above its book value in December. 

The company added that “investment market activity has fallen this year and may remain subdued during a period of heightened political and economic uncertainty especially in relation to Brexit. However, there is significant global capital waiting to be deployed into the London office investment market once conditions become clearer.”


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