TIDMDLN
RNS Number : 3675K
Derwent London PLC
05 May 2022
5 May 2022
Derwent London plc ("Derwent London" / "the Group")
Exchange of conditional contract to acquire City Road Island
EC1
Derwent London is pleased to announce that it has exchanged a
conditional contract to acquire the freehold of City Road Island
EC1, the site of the Moorfields Eye Hospital and the UCL Institute
of Ophthalmology.
The site is being sold by Moorfields Eye Hospital NHS Foundation
Trust and UCL, together the Oriel joint initiative ("Oriel"), for
GBP239m(1) before costs. This is subject to receipt of final
Treasury approval, which is expected in H2 2022. Completion is also
conditional on delivery by Oriel of the new eye hospital at St
Pancras and subsequent vacant possession of City Road Island which
is anticipated in early 2027.
Derwent London has appointed architects AHMM alongside a full
professional team and will undertake significant community
engagement as part of its regeneration plans. This important 2.5
acre site, with its c.400,000 sq ft of existing buildings, is
located in the heart of the Tech Belt where the Group has
substantial holdings. Our early appraisals show the site has
potential to deliver a major 750,000+ sq ft campus with generous
public realm and strong environmental credentials.
Paul Williams, Chief Executive of Derwent London, said:
"We are delighted to have secured such an important central
London regeneration opportunity in the heart of the Tech Belt,
where we aim to deliver the next generation of distinctive
'long-life, loose-fit, low carbon' commercial space."
Martin Kuper, Chief Executive of Moorfields Eye Hospital NHS
Foundation Trust said:
"This is an important step forward for our plans for Oriel, a
new eye care, research and education centre. The sale of our City
Road Island, which is conditional on Treasury approval of Oriel, is
a key element of our funding strategy. All proceeds will be
reinvested in the new centre to secure the long-term future of
world-leading eye care, research and education in a way that
represents value for money and benefits our patients. We will
continue to maintain our strong links with Islington Council as
plans for City Road Island progress."
Professor Alan Thompson, Dean of the UCL Faculty of Brain
Sciences, said:
"This is a significant step towards realising the Oriel joint
initiative. Oriel will bring together UCL's formidable research
base with Moorfields' world-class healthcare delivery in one
integrated centre of research, education and care."
Robert Dufton, Chief Executive, Moorfields Eye Charity,
said:
"We're very pleased to reach this significant milestone in
achieving Oriel which helps to secure investment in the new
world-leading centre for eye health integrating research, patient
care and education in a state-of-the-art building and benefitting
people on a global scale. Philanthropy has a critical role to play
in realising Oriel. We're very grateful to donors who have
committed their support and to those interested in hearing
more."
Initial impact on earnings and NAV
Derwent London is disclosing the following additional
information for Listing Rules purposes.
On completion the acquisition is expected to have a marginal
impact on the Group's earnings.
The GBP239m(1) consideration to be paid by the Group on
completion of the acquisition is in line with the market valuation
for the estate which does not yet benefit from planning consent and
will be paid from undrawn debt facilities and cash. The contract
also contains potential overage arrangements that may be payable
based on the planning consent that is achieved and/or any future
disposal of the site within an agreed time period. The potential
amounts payable in relation to such overage arrangements are
subject to an aggregate cap, with such cap also including the
purchase consideration to be paid on completion.
(1) The exact amount depends on the terms of the planning
consent obtained as at the point of completion of the acquisition,
with
GBP239m being the base consideration.
For further information, please contact:
Derwent London Paul Williams, Chief Executive
Tel: +44 (0)20 7659 3000 Nigel George, Executive Director
Robert Duncan, Head of Investor
Relations
Brunswick Group Nina Coad
Tel: +44 (0)20 7404 5959 Emily Trapnell
Notes to editors
Derwent London plc
Derwent London plc owns 77 buildings in a commercial real estate
portfolio predominantly in central London valued at GBP5.7 billion
as at 31 December 2021, making it the largest London-focused real
estate investment trust (REIT).
Our experienced team has a long track record of creating value
throughout the property cycle by regenerating our buildings via
development or refurbishment, effective asset management and
capital recycling.
We typically acquire central London properties off-market with
low capital values and modest rents in improving locations, most of
which are either in the West End or the Tech Belt. We capitalise on
the unique qualities of each of our properties - taking a fresh
approach to the regeneration of every building with a focus on
anticipating tenant requirements and an emphasis on design.
Reflecting and supporting our long-term success, the business
has a strong balance sheet with modest leverage, a robust income
stream and flexible financing.
As part of our commitment to lead the industry in mitigating
climate change, Derwent London has committed to becoming a net zero
carbon business by 2030, publishing its pathway to achieving this
goal in July 2020. In 2019 the Group became the first UK REIT to
sign a Revolving Credit Facility with a 'green' tranche. At the
same time, we also launched our Green Finance Framework and signed
the Better Buildings Partnership's climate change commitment. The
Group is a member of the 'RE100' which recognises Derwent London as
an influential company, committed to 100% renewable power by
purchasing renewable energy, a key step in becoming a net zero
carbon business. Derwent London is one of only a few property
companies worldwide to have science-based carbon targets validated
by the Science Based Targets initiative (SBTi).
Landmark buildings in our 5.6 million sq ft portfolio include 80
Charlotte Street W1, Brunel Building W2, White Collar Factory EC1,
Angel Building EC1, 1-2 Stephen Street W1, Horseferry House SW1 and
Tea Building E1.
In January 2022 we were proud to announce that we had achieved
the National Equality Standard - the UK's highest benchmark for
equality, diversity and inclusion. In April 2022, Derwent London
won the BCO Best Commercial Workplace award for 80 Charlotte
Street. In October 2021, the Group won EG's UK Company of the Year
award and in January 2022 came top of the Property Sector and 38th
position overall in Management Today's Britain's Most Admired
Companies awards 2021. In 2020 the Group won several awards for
Brunel Building with the most prominent being the BCO Best
Commercial Workplace award. In 2019 the Group won EG Offices
Company of the Year, the CoStar West End Deal of the Year for
Brunel Building and Westminster Business Council's Best Achievement
in Sustainability award. In 2013 the Company launched a voluntary
Community Fund and has to date supported well over 100 community
projects in the West End and the Tech Belt.
The Company is a public limited company, which is listed on the
London Stock Exchange and incorporated and domiciled in the UK. The
address of its registered office is 25 Savile Row, London, W1S
2ER.
For further information see www.derwentlondon.com or follow us
on Twitter at @derwentlondon
Forward-looking statements
This document contains certain forward-looking statements about
the future outlook of Derwent London. By their nature, any
statements about future outlook involve risk and uncertainty
because they relate to events and depend on circumstances that may
or may not occur in the future. Actual results, performance or
outcomes may differ materially from any results, performance or
outcomes expressed or implied by such forward-looking
statements.
No representation or warranty is given in relation to any
forward-looking statements made by Derwent London, including as to
their completeness or accuracy. Derwent London does not undertake
to update any forward-looking statements whether as a result of new
information, future events or otherwise. Nothing in this
announcement should be construed as a profit forecast.
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