Derwent London plc (DLN.L) announced that it has pre-let all the office accommodation, totalling 155,600 sq ft, at Turnmill, 63 Clerkenwell Road EC1 and 40 Chancery Lane WC2, two of its current schemes. The company stated that the space has been let to agencies within Publicis Groupe, one of the world's leading communications groups.
According to the company, At Turnmill, the office rent will be 3.1 million pounds per annum on 58,200 sq ft leaving 12,300 sq ft of retail space to be let with a December 2012 estimated rental value or ERV of 0.4 million pounds. At 40 Chancery Lane, the office rent will be 5.7 million pounds per annum on 97,400 sq ft , which leaves 4,400 sq ft of retail space to be let with a December 2012 ERV of 0.1 million pounds. Derwent London's share of the office rent, after deducting a ground rent, will be 7.8 million pounds per annum.
Both leases are for a term of 20 years with rent reviews every five years and a rent-free period equivalent to 32 months. There is a tenant's break in year 18 which, if exercised, will result in a penalty becoming payable, the company said.
The company stated it is currently on site at both developments and they are expected to be handed to Publicis Groupe for fit out in July 2014.
Turnmill is a 70,500 sq ft new office and retail development on a prominent corner site, which the Group holds freehold, opposite Farringdon station, where a Crossrail interchange is under construction. The office space is arranged over the five upper floors, with a ground floor reception.
40 Chancery Lane will be a 101,800 sq ft seven-storey building located on a large Midtown corner site. The Group holds a 128-year headlease with a ground rent equal to 18% of the rent received. It has the right to reduce this gearing to 10% through the payment of a premium to the freeholder.
Whilst Turnmill and 40 Chancery Lane are being completed, agencies of Publicis Groupe will continue to occupy their existing offices at Derwent London's 80 Charlotte Street W1. Therefore, the start of the Group's 385,000 sq ft redevelopment of this property is now likely to commence in the first half of 2015 with completion scheduled for the second half of 2017, Derwent London said.
John Burns, Chief Executive Officer at Derwent London, said, "Our next major project will start early next year at White Collar Factory, in the heart of the Tech Belt, which leaves a further 1.9 million sq ft of potential development for delivery before 2020."
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