Derwent London to issue 175 mln stg convertible

British office landlord Derwent London is to issue a 175 million pound ($284 million) convertible bond to fund development and future acquisitions.

Derwent also said on Tuesday the central London office market had continued to perform strongly.

The five-year bonds will be priced at par and were expected to carry a semi-annual coupon of 2.5-3.0 percent, the company said, adding the size could be raised to 200 million pounds.

Derwent said it would use the bond to diversify its sources of finance as it sought to fund its development pipeline and provide for future acquisitions.

Derwent said it had 21 transactions in the first half, totalling 130,500 square feet and generating annual rental income of 3.6 million pounds, with subsequent lettings of 50,4000 square feet since March 31 for 2.1 million of rental income.

Open market lettings completed so far in the first half had rents 8.3 percent above estimated values at Dec. 31, the company said.

Derwent said it exchanged contracts for Victory House in Tottenham Court Road for a 37.2 million pounds, yielding a profit of 10 million pounds, and for five properties in Covent Garden for 68 million pounds.