Derwent London sellls three properties for EUR 258m

Derwent London is selling three non-core assets which were acquired through the merger with London Merchant Securities last February. The transaction price comes to £175 mln (EUR 258 mln), before disposal costs. Derwent said 'the deal achieved £91.8 mln above the properties' book value of £83.2 mln.'

The assets include Greenwich Reach, an eight-acre cleared site on the South bank of the Thames, overlooking Canary Wharf, which is being sold to Roamquest, part of Galliard Homes, for £111.8 mln. The site currently has planning consent for 980 residential apartments and 71,155 sq ft (6,600 m2) of commercial/retail space. Derwent has also agreed to sell 158-166 Brompton Road, in Knightsbridge, to a private purchaser for £45 mln. This property comprises retail, office and residential space, totalling 27,000 sq ft and produces a short-term income of £0.8 mln per annum. The company is also selling 3 & 4 South Place, to the Frogmore Group for £18.2 mln. Situated close to Broadgate in the City, the properties comprise two adjacent vacant office buildings totalling approximately 36,000 sq ft.

Derwent said the disposals are the first since its conversion to REIT status on 1 July 2007. Both South Place and Brompton Road are within the tax-exempt REIT ringfence and will therefore not be subject to tax on their disposal. 'Proceeds from the sales will be channelled into our substantial pipeline of refurbishment and redevelopment schemes as well as future acquisitions. Further disposals of non-core and provincial properties will follow. These sales endorse the strength of the London property market and Derwent London's commitment to concentrate on major office and refurbishment schemes within our chosen Central London villages,' John Burns, ceo of Derwent London said.