Derwent London has increased its guidance for rents and yields in 2017 and decided to press ahead with its 285,000 sq ft scheme at Soho Place.
In interim results this morning, the London office specialist said it expected growth in estimated rental values (ERVs) in 2017 of between 2% and -3%, up from between 0% and -5% previously. The company also said it was “now of the view that yields are likely to remain firm this year.”
It follows a record six months of lettings totalling £23.4m, 0.5% above December 2016 ERVs.
For the half year to 30 June, Derwent also posted a 0.9% increase in EPRA net asset value per share to 3,582p and EPRA earnings per share rose by 22.3% to 45.42p.
This year, the company has completed or agreed disposals, including the £165m forward sale of The Copyright Building to Union Investment, totalling £492m, 10% above December 2016 book values.
Derwent chief executive John Burns said: “We have achieved a record £23.4m of new lettings in the first half. Following this success, we have marginally raised market guidance for both rents and yields in 2017.”
On the back of its recent lettings performance, Derwent has decided to press ahead with its 285,000 sq ft mixed use scheme at Soho Place, previously 1 Oxford Street. It is progressing detailed design and engaging with potential contractors with a view to starting in the second half of 2018. The estimated capex for the project is £260m.
Burns said: “Despite continuing political uncertainty, we have made strong progress in capturing reversion and de-risking the pipeline which highlights the appeal of our product. This has given us the confidence to advance with our next major development at Soho Place W1, above Tottenham Court Road Elizabeth Line station.”