Asset management

With the backdrop of a worsening occupational market, our asset management team has delivered an impressive letting performance across the portfolio. As in previous economic downturns, the focus has been on tenant retention, income protection and maximising occupancy, and our activity levels have been high:

  • 89 new leases completed (2008: 85 leases) generating annual rent of £11.7 million (our share £9.9 million; 2008: £19.8 million) or 14.1% of rent roll;
  • a further 32 lettings are currently under offer accounting for £2.3 million p.a. in rent (our share £1.6 million);
  • rent reviews of £4.9 million (our share £3.6 million; 2008: £3.6 million) were settled during the year, some 3.0% ahead of ERV at rent review date; and
  • total space covered by new lettings, reviews and renewals was 473,500 sq ft (2008: 684,500 sq ft).
89 new leases completed securing annual rent of £11.7 million (our share £9.9 million)

New lettings and renewals by quarter

The rate of leasing which was subdued in the first half has picked up significantly in the fourth quarter of our financial year. Even in today‚Äôs difficult commercial environment, tenants are frequently attracted to the right mix of location, building quality and competitive pricing. The Group (including our share of JVs) took lease surrenders worth £0.7 million per annum over 28,300 sq ft during the year (2008: 294,000 sq ft). In many cases these transactions enabled rental levels to be enhanced from the previous passing rent or provided for the alignment of an occupational lease to allow a future refurbishment scheme to be implemented. The portfolio void rate at year end of 7.8% (2008: 3.2%) has increased partly due to lease expiries at Wigmore Street, W1 and Buchanan House, 24/31 Holborn, EC1 where we have deferred redevelopment and have been seeking short-term lettings to maintain flexibility. Excluding these properties where the strategy has recently changed to reflect market conditions, the void rate would be 5.9%. Letting activity since the year end has reduced the void rate to 7.3%.