StockMarketWire.com - Derwent London had a record year of lettings totalling £31.4m for the 12 months to the end of December.

EPRA1 net asset value per share increased 0.5% to 3,551p from 3,535p at 31 December 2015, 1.3% lower than 3,598p at 30 June 2016.

Net rental income increased 5.2% to £145.9m from £138.7m in 2015 and EPRA earnings rose 8.9% to £85.7m from £78.7m last year.

EPRA earnings per share increased 7.9% to 76.99p per share from 71.34p in 2015·

The proposed final dividend per share is up 25.0% to 38.50p making 52.36p for the full year, an increase of 20.6%.

The group said the increase reflected strong recurring earnings growth since 2014 and de-risking of 2017-18 pipeline.

It also announced a proposed special dividend of 52p per share.

Chairman Robbie Rayne said: "Despite economic and political headwinds last year, today's results demonstrate the strong progress made by Derwent London in 2016, providing evidence of the underlying strength of our business and the quality of our people and portfolio.

"The Board has proposed a 25% increase in the final dividend, reflecting our financial position and the de-risking of our 2017/2018 pipeline in the last twelve months.

"In addition, following the value-enhancing transactions announced today, we are proposing a special dividend of 52p per share."

Chief executive John Burns added: "These results highlight how our business model of creating well-designed and innovative office space in improving locations can make meaningful progress even in less buoyant market conditions.

"Whilst we believe it is right to remain cautious, we are in a strong financial position with a well balanced portfolio rich with opportunities which gives us considerable scope to create further growth in our business. 2017 has started well for us as evidenced by this morning's announcements."

The group also announced that it has regeared a number of leases with the Expedia group and Cancer Research UK at Angel Building, Islington EC1.

Expedia will occupy 231,400 sq ft or 93% of the office element from 2020, and has extended its tenure from 2021 to 2030.

There are minimum rental uplifts on various leases at the next review either in 2020 or 2021.

Expedia will also have the right of first refusal on the remaining 17,100 sq ft of office space when the lease expires in 2021.

Expedia currently occupies 93,400 sq ft and has agreed to take on two other leases.

The majority of this additional space becomes available when Cancer Research UK moves to a new headquarters, which is unlikely to occur before 2019.

Following this change, Expedia will be the principal occupier of the building through 2030.

* Derwent London has agreed to sell the freehold interest in 132-142 Hampstead Road NW1 for £130m before costs.

The purchaser was the Secretary of State for Transport.

The property provides 219,700 sq ft and is let to University College London for £1.7m pa.

The property was acquired in 2007, and planning for the development of 233,000 sq ft of offices and 38 residential units was achieved in 2010.

The offices were designed as Derwent London's first White Collar Factory development, the same concept that is now being successfully delivered at Old Street Yard EC1, and had attracted considerable pre-letting interest.

However, these plans were unable to be carried forward due to the decision to build HS2 announced in 2012.

The December 2016 book value, which did not reflect the full benefit of the very valuable planning consent, was £115m.

* A UK subsidiary of Arup Group has signed an agreement to pre-let 133,600 sq ft at Derwent London's 80 Charlotte Street W1, on completion of the development in the second half of 2019.

Simultaneously, the group has agreed a conditional put and call option to sell 8 Fitzroy Street W1 for £197m to Arup, which occupies the entire building, with completion expected on 23 June 2017.

At 80 Charlotte Street, Arup has agreed a 20-year lease on the first to third floors as well as part of the ground and lower ground floor space.

The initial annual rent of £9.74m represents £75 per sq ft on the main office floors.

The rent will rise by 2.25% per annum for the first 15 years, at which point there is an upward only open market review.

In return, Arup will receive rental incentives equivalent to 33 months' rent free.

After allowing for the impact of indexation, the average rent over the first five years is in line with our June and December 2016 ERVs.

Arup also has an option to take the 40,700 sq ft fourth floor.




At 8:12am: [LON:DLN] Derwent London share price was +89p at 2804p



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