Our business

Asset management

Our asset management team have again produced encouraging results in an improving market environment.

The highlights of a busy year were:

  • 100 new leases were completed (2010: 144 leases) generating annual rent of £10.8 million (our share £9.2 million; 2010: £11.2 million) or 13.3% of rent roll;
  • a low investment portfolio EPRA vacancy rate of 2.7% at 31 March 2011 was an improvement on 3.7% at 31 March 2010;
  • a further nine lettings were under offer at 31 March 2011, accounting for £5.2 million p.a. in rent (our share £5.1 million);
  • 21 rent reviews of £9.9 million (our share £5.4 million; 2010: £1.6 million) were settled during the year, some 3.7% ahead of ERV at the rent review date; and
  • total space covered by new lettings, reviews and renewals during the year was 477,000 sq ft (2010: 494,000 sq ft).

The second half of the financial year has seen several major lease restructuring events which will secure future income and drive capital value growth.

In December 2010, we agreed with Telewest UK at 160 Great Portland Street, W1 to accept the surrender of their leases in two tranches for £30.0 million. The payment is equivalent to 6.3 years of the annual rent of £4.74 million per annum, with 7.5 years remaining until expiry of the leases in June 2018. The tenant has undertaken a phased vacation of the building between January and May 2011. This deal enables us to refurbish the 89,900 sq ft building and we are delighted to announce the pre-let of the entire building to an existing tenant.

At the end of January, we restructured the occupational leases at 90 Queen Street, EC4 by moving the tenant break from 2013 to 2021, extending the lease from 2017 to 2026 whilst reducing the passing rent from £3.4 million to £2.9 million p.a. We believe this transaction will both underpin the capital value of the property which has grown over 30% since purchase in October 2009, and support future value progression.

At our 88,400 sq ft prime retail holding at Mount Royal, 508/540 Oxford Street, W1 we operated a retail tenant's lease break and re-let the space to Holland and Barrett at £420 per sq ft Zone A rental, 45% above the previous rent. Using this rental evidence, in January 2011, we were able to agree another rent review on the largest unit, let to Next, at the same Zone A rate, this time at 25% above passing rent.