Derwent sees opportunities as banks offload property exposure
Derwent London today echoed recent comments from British Land when it said that buying opportunities had risen marginally since the summer, and it expected this trend to continue “as certain banks become more active in reducing their property exposure”. It added that after around 15 months of yield compression, levels seem now to have stabilised.
The REIT noted that the market for London office property had benefited from the capital’s continued outperformance compared with the broader economy, as demand remained steady and vacancy rates continued to fall.
Derwent completed its flagship 263,000 sq ft Angel Building development during the past quarter and said it had received good occupier interest in the remaining 137,000 sq ft of office and retail space available in the project. The group has fattened up its pipeline – a 121,500 sq ft mixed-use development at 60 Commercial Road, E1, has received planning permission and further applications have been made for three schemes totalling 605,000 sq ft at Hampstead Road, NW1, Pentonville Road, N1, and City Road Estate, EC1. Derwent will also be submitting a planning application in the near future for a 320,000 sq ft redevelopment at Charlotte Street, W1.
The group said it was pleased by the news in the recent Spending Review that the future of Crossrail was secure, which it said would benefit its proposed Charing Cross Road/Oxford Street development and its surrounding Fitzrovia properties. “We continue to look for buildings that offer significant asset management and refurbishment potential, similar to those at Central Cross,” it added. Derwent bought the 251,000 sq ft Central Cross office and retail property on Tottenham Court Road, W1, in a £146m deal completed during August that it said offered significant opportunities to add value.
