Strong Central London offices market boosts Derwent trading
Derwent London today announced it had cut its vacancy rate to just 0.8% as of 30 September, compared with 4.0% at the end of June and 5.9% at the start of the year. The strength of the market for available office space in Central London has boosted the company’s trading in the first nine months of 2011, with 27 transactions concluded in Q3 at a rent of £4.8m per year and with total floorspace of 137,300 sq ft. “Open market lettings in the quarter were 8.8% above estimated rental values at 31 December 2010 and 1.2% above 30 June 2011 values,” the group added.
Since the end of September, Derwent London has concluded a further 73,600 sq ft of lettings at a rent of £2.8m per year. It also has another 15,700 sq ft currently under offer.
“Within the middle market sector for central London offices we continue to see good demand for our particular brand of space,” the group declared, noting that high-quality London investments remained in demand from a wide range of domestic and overseas investors. It also highlighted that Grade A space in the West End was in short supply, and said that the current economic uncertainty could hold back the rate of new supply to the central London market.
The group was on site at four projects as of the end of September, with a total office floorspace of 307,000 sq ft and a capital expenditure to complete of around £42m. It noted that it had very good support from its banks – and was moving ahead on three sets of refinancing negotiations, which it said should be concluded around the year-end – and was well positioned to finance its project pipeline. It was also “assessing a variety of potential acquisitions” in Central London.
