Derwent lifts annual ERV outlook on strong London office market performance

(Reuters) - Commercial landlord Derwent London Plc on Tuesday raised its annual average portfolio estimated rental value (ERV) outlook, as its key London office market performed near the upper end of its expectations during the first half of the year.

The London-headquartered firm raised its average portfolio ERV to a range of +2% to -2% for 2021, from the March estimate of 0% to -5%. Shares were up 1.5% in early trade.

The FTSE-250 company said London's business confidence and economy were stronger than expected in the first six months of this year, helped by the successful rollout of the UK's vaccination programme, leading to increased property and letting activity levels.

"We expect these trends to strengthen further in the second half now that most lockdown restrictions have been lifted," Chief Executive Officer Paul Williams said in a statement.

Derwent said the rent collection has picked up with offices segment, which forms the bulk of its income, close to pre-pandemic levels.

Net rental income for the six months ended June 30 rose to 90.1 million pounds ($124.86 million), up from 84.4 million pounds a year earlier, while EPRA Net Tangible Assets, a key metric for the sector, rose 1.4% to 3,864 pence per share, from 3,812 pence at Dec. 31, 2020.

The company also announced an interim dividend of 23 pence per share, up from 22 pence per share in the year-ago period.

($1 = 0.7216 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich)