Derwent rental income and sales value rise in Q3

12th Nov 2014 14:25

Real estate investment trust Derwent London said rental income and average sales values rose in the third quarter.In the three months to 30 September, the firm completed 70,000sq ft in letting, generating £4m per year in rental value, an 8.9% increase on the value it had estimated at the end of June.Third quarter lettings were agreed 8.9% ahead of June rental values."We remain confident about our portfolio's prospects for both rental growth and firm property yields during the rest of this year and into 2015," said chief executive John Burns."Against this background Derwent London is well positioned with its substantial and flexible development programme."The company said it anticipated 277,500sq ft of development to be completed in early 2015, with 66% of it already let, while a further 485,000sq ft will be developed next year.The group's vacancy rate rose in the third quarter to 3.9% from 1.4% at the end of June on the back of the completion of new development, the firm said.Broker Liberum said the results underlined the robust London markets, showing continuing strength in London's occupier and investment markets and highlighting the strong increase in lettings over June 14 rental values (ERVs)."This is consistent in our view with the company's 6-8% 2014 ERV growth guidance, and we remain comfortable with our forecasts at the top end of this range."