Office developer Derwent London's share price climbed this morning after it lifted its final dividend by 25 per cent and also announced a special dividend.
In its results for the year ending 31 December, Derwent posted a net rental income growth of 5.2 per cent, up from £138.7m in 2015 to £145.9m last year.
The developer announced a record year for lettings – on top of record figures last year – with lettings totalling £31.4m.
Derwent's final dividend rose 25 per cent to 38.5p, bringing the full year total to 52.36p, which the company said "reflects strong recurring earnings growth". The company said "value-enhancing transactions" meant is would be issuing a special dividend of 52p per share, which will be paid on 9 June to those who invest before 5 May.
Derwent's share price was up two per cent at time of writing.
Why it's interesting
As a middle-market office developer, which is not focused on the City, Derwent is confident that it can weather any softening of the lettings market that might follow on from the Brexit vote. Today, John Burns, founder and chief executive of Derwent, said that "things are going at a slower pace" but that all the lettings Derwent completed before the referendum had not been renegotiated, showing business' confidence in London going forward.
Derwent also announced the transactions that had spurred it into handing out a special dividend. Engineering firm Arup has taken 133,600 square feet in Derwent's Charlotte Street offices and Expedia has extended the amount of space it occupies in Derwent's Angel Building. In addition, Derwent has sold 132-142 Hampstead Road to the transport secretary for £130m.
What Derwent London said
Burns said: "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."