Our business

Asset management

Good property companies are defined by the quality and success of their asset management activities and we have had another strong year. We have continued to prioritise both high occupancy (through tenant retention and a focused leasing effort) and strong cash flow generation with good results:

  • 144 new leases were completed (2009: 89 leases) generating annual rent of £13.3 million (our share £11.2 million; 2009: £9.9 million) or 16.5% of rent roll;
  • 71% of all tenancies by area, with lease breaks or expiries in the year to 31 March 2010, were retained or relet, up from 57% for the year to 30 September 2009;
  • a further 25 lettings were under offer at 31 March 2010, accounting for £1.6 million p.a. in rent (our share £1.2 million);
  • ten rent reviews of £2.4 million (our share £1.6 million; 2009: £3.6 million) were settled during the year, some 1% ahead of ERV at the rent review date; and
  • total space covered by new lettings, reviews and renewals during the year was 494,000 sq ft (2009: 473,000 sq ft).

New lettings and renewals by quarter

These asset management successes drove the investment portfolio void rate at 31 March 2010 down to 3.4% versus 7.8% at last year end. Leasing activity was strong throughout the second half with 60% of these recent lettings in line with the valuer’s September 2009 estimates, whilst the balance were well below the September 2009 ERV because they incorporated landlord’s breaks to allow possible redevelopment during the next three years.

In the year to 31 March 2010, 169 leases covering around 428,000 sq ft of space with a rental value of £11.3 million were subject to lease expiry or tenant break. Tenants were retained for 71% of this space by area and by the end of March 2010 we had leased or put under offer a further 16% leaving only 7% to transact after stripping out the 6% where we need vacant possession to enable development.