SPENDING cuts are not hitting the capital’s commercial rental market, according to the chief executive of developer Derwent London.
John Burns also said that global economic uncertainty had failed to hurt deals for offices in the firm’s West End heartland.
He was speaking as Derwent reported a strong first-half rise in asset values and a 1.14 per cent increase in pre-tax profit to £26.6m, when measured under European Public Real Estate Association (EPRA) standards.
He said the capital’s commercial property market had escaped another slump since the 2008 crisis, despite the recent wave of job cuts in the City.
“The London economy has not been affected at all so far since the peak of the last downturn. It is very robust,” Burns told City A.M.
Two-thirds of Derwent London’s portfolio is based in the West End with the rest on the borders of the City, he said.
Last summer Derwent London made its long-awaited return to investment with the £146m purchase of the West End’s Central Cross building. Over the next 15 months it will be on-site for 450,000 sq ft of office developments and is interested in making further acquisitions.
“We will make some acquisitions where [there are] opportunities.
“Central London is very much in demand… We are not really a seller but if people want to bid at strong levels we will look at them.”
The firm said estimated rental values rose four per cent in the first half of the year and the value of its property portfolio increased 5.1 per cent to £2.6bn. It posted a 10 per cent rise in adjusted net asset value per share under EPRA standards to £16.21 in the first six months of the year.
Derwent shares rose one per cent to £15.70 yesterday.