REIT Watch: Derwent London Reports Record High Lettings

on Aug 15, 2013
Listen Thursday, August 15th: Derwent London, the largest London-focused real estate investment trust with a portfolio valued at about ₤3.1 billion, reported a successful first half today with lettings hitting an all-time high on the back of booming demand for office space in the capital’s Tech Belt.

Net asset value per share at the company increased to 2,054p in the six months ended June 30, up 16 percent from the same period a year ago. Profit before tax rose to ₤28 million and earnings per share increased to 25.95p. The interim dividend was lifted by eight percent to 10.75 per share.
“Though there are now signs of more general improvement, London’s ever-evolving economy continues to outperform that of the rest of the UK. The capital is an attractive place for some of the world’s most innovative businesses and has broad appeal to real estate investors globally,” commented Chairman Robert Rayne.

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Derwent said it currently had ₤72 million of schemes under construction, comprising 279,700 sq. ft. of space. The REIT is planning to start construction on another 345,000 sq. ft. of space over the next 12 months, with a development value of ₤119 million. “The depth of occupier requirements gives us the confidence to start construction … ,” Derwent said.

In June the REIT acquired Mark Square House, 1 Mark Square EC2 in Shoreditch for £29.6 million with a net initial yield of five percent. The building has a gross leasable area of 61,700 sq. ft. and is let to Thomson Reuters until 2017 with the option for an extension. Derwent, whose other tenants include WPP, Burberry and Unilever, still has ₤400 million remaining to spend on developments and acquisitions.

Shares in the real estate investment trust today rose by 0.85 percent to 2,365.00p in London.
**Axis REIT Issues RM155 Million Sukuk**
!m[Axis REIT Issues RM155 Million Sukuk](/uploads/story/4857/thumbs/pic-1_inline.jpg)
Axis REIT today successfully issued RM155 million (₤30.4 million) sukuk – financial certificates similar to a bond that comply with Islamic religion law. The five-year sukuk of the company will have an annual financing rate of 4.13 percent, while the seven-year sukuk will have 4.18 percent.

In a filing with Bursa Malaysia, Axis said the RM155 million sukuk had five tranches, with the first two being rated triple-A. The first tranche of RM70 million (₤13.7 million) would be issued at a seven-year tenure while another RM60 million (₤11.8 million) would have a five-year tenure.
The proceeds from the second sukuk issue would be used to refinance the REIT’s existing facilities.
“With this second sukuk issue, Axis Real Estate Investment Trust has successfully increased its weighted average debt maturity to 4.2 years matching the fund’s assets portfolio’s weighted average lease expiry of 4.34 years (by area),” the company said in a statement.
**Derwent London’s share price was 2,365.00p as of 15.08.2013, 14.50 BST.**
**Axis REIT’s share price was RM3.5 as of 15.08.2013, 14.50 BST.**


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