Derwent London has defied the uncertain, deal-light market to complete two purchases for £100m, on the back of half-year results that showed central Londone in rude health.
Derwent has bought a 1.85 acre site in Euston, containing 231,426 sq ft of office and warehouse buildings and a petrol station, for £52.5m, and is planning a redevelopment.
The site has planning permission for 212,050 sq ft of office space and 49,514 sq ft of industrial space, but Derwent plans to resubmit plans that contain an increased amount of office space and some residential development.
Derwent has also bought the 75,348 sq ft Woodbridge House in Clerkenwell for £46.3m. The building is let to law firm Pinsent Masons at £2.45m a year on a lease expiring in 2015. Derwent said it planned to add additional space and improve the configuration of the building.
Chief executive John Burns said that he did not think the current market uncertainty would adversely affect the West End, where the company has 70% of its assets. ‘We will always be prepared to buy when we see opportunities, but I don’t expect there will be any great bargains in the West End,’ he said.
Burns was speaking as Derwent announced strong interim results for the period to 30 June. As with Great Portland Estates, the company has benefited from focusing on central London, and the West End in particular, where demand for space still outstrips supply.
The value of the company’s investment portfolio has risen to £2.8bn from £2.5bn in this period, and the value of its core central London portfolio has risen 11% to £2.53bn.