Derwent London PLC

LSE:DLN

Earnings Call Transcript 2019-Q1

[Operator]

Ladies and gentlemen, welcome to the Derwent London 2019 Q1 Business Update. My name is Jasmine, and I will be the operator for your call this morning. [Operator Instructions]I will now hand you over to John Burns.

[John David Burns, Founder, CEO & Director]

Thank you, Jasmine. Good morning, and thank you for listening. I'm here with Paul, Damian and Nigel. First, I'm going to say a few words, then the call will open for questions.The Central London office market continues to see good occupy demand, particularly for pre-lets. We already achieved GBP 17 million of new lettings this year, on average 6% above ERV.Highlights were 2 further lettings inserting 83,000 square feet in Brunel building, our first office pre-letting of 103,000 square feet at Soho Place. We believe the fact that this deal was achieved so early, and the construction process is ample proof of the demand of well-designed buildings in good locations.These significant deals mean that all the office space at Brunel building is pre-let ahead of completion this half. And overall, our 1 million square feet of development are now 64% pre-let.Apart from the letting activity, the Central London office market had a relatively quiet first quarter, with MSCI IPD reporting rental values of a modest 0.2%. In our own portfolio, we have seen our EPRA vacancy rate edge down to 1.7%, and we've made 2 modest disposals achieving nearly 7% above book values.Our finances remain strong with an LTV of just 17.5% and GBP 500 million of undrawn facilities and cash. The strength of our balance sheet, together with our continued letting success leaves the group in a very strong position to pursue new opportunities.I will now ask the operator to open the line for questions.

[Operator]

[Operator Instructions] And there are no questions at this time.

[John David Burns, Founder, CEO & Director]

Okay. Thank you. Thank you again for listening, and I would like to thank you all for the support you've shown me as Chief Executive over the years. I'm extremely proud of what Derwent London has achieved in its first 35 years. There's plenty still to do, and I am very excited to see what Paul and the team will do in the future. I know the group is in great hands. Thank you very much. Good morning to you.