Derwent London Adds To Portfolio With GBP146M Purchase

28th Jul 2010 08:15

By Anita Likus Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Landlord and developer Derwent London PLC (DLN.LN) Wednesday added to its central London portfolio with the GBP146 million purchase of a building at one of London's busiest shopping streets. It bought the 251,000-square-feet retail and office property called Central Cross at 18-30 Tottenham Court Road and 1-2 Stephen Street, which is situated on a 2.1-acre site. The building fronts onto Tottenham Court Road, which is known for its electrical stores and furniture shops. The acquisition will be financed from Derwent London's existing bank facilities. Annual rental income is GBP8.1 million from 21 leases to 10 tenants. Average rent is GBP34 per square foot. Its three principal tenants, which account for nearly 90% of the rental income, are Bertelsmann AG subsidiary FremantleMedia Group, one of the largest creators and producers of entertainment brands in the world; Ascent Media, a global media company; and S Technologies, the owner of Skype. Derwent said that 33% of the rental income is secured beyond 2020 but that 38% is subject to lease expiries or breaks before December 2011. "Both the property's office and retail elements offer significant opportunities for future refurbishment and improvement," the company said. Derwent has a reputation for acquiring buildings in London's West End, Fitzrovia north of Oxford Circus, and around Victoria, that can be enhanced through refurbishment, added floors, or complete redevelopment. "This acquisition provides strong income at economic rental levels, together with opportunities for active management, future refurbishment and improvement of the office space which Derwent specializes in," Chief Executive John Burns said. "We will also be looking to enhance the retail units fronting Tottenham Court Road, which will benefit substantially from nearby infrastructure improvements including Crossrail." The transaction requires the purchase of units in Merbrook Central Cross Property Unit Trust, a Jersey property unit trust that holds the property. The units will be acquired from TCR 1 Ltd. and TCR 2 Ltd,, Guernsey-registered companies. At 0713 GMT, Derwent London shares traded up 21 pence, or 1.6%, at 1376 pence. -By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; [email protected] (END) Dow Jones Newswires July 28, 2010 03:15 ET (07:15 GMT)