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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, welcome to the Derwent London Conference Call. My name is Emma, and I will be the operator for the call this morning. [Operator Instructions] I will now hand you over to John Burns, Chief Executive, to begin.
Thank you. Good morning. It's John here. And thank you for joining us for Derwent London's First Quarter Business Update to '18. I'm here joined by Damian, our FD; and David Silverman. I'll briefly talk through the key points, and then we'll open the call for any questions you may have. As you can see from our statement, occupier interest in our buildings remains strong. We have let or have under offer 165,000 square feet, which if all complete, represents GBP 9.6 million of new rents. Based on the deals that are actually completed, new letting's around 5% above December 2017 ERV. We're making progress on our major developments, and Brunel Building, Paddington is 32% under offer. We have gained access to our next major scheme at Soho Place W1, over the Tottenham Court Road Elizabeth line station, and we are starting preliminary work. The 4.1% EPRA vacancy rate is higher than in December, reflecting the completion of 2 recent refurbishments. These are the recently-completed 58,400 square feet Johnson Building, Hatton Garden, EC1; and 18,700 square feet in part of 25 Savile Row, W1. We remain in a very strong financial position, both to fund our development program and to invest in any fresh opportunities that we might see. I'm now going to hand you back to the operator, and we'll be very pleased to take questions.
[Operator Instructions] First question is from the line of Hemant Kotak with Green Street Advisors.
Just 3 very quick questions from me, please. Can you just tell us the -- how much -- how the -- how for that GBP 7.2 million of rents which you had under offer, how much of that -- how that compared to the ERV piece and in particular, the Brunel Building?
I don't think we can tell you that till we make announcements.
I see. Okay. Can you provide any guidance on maybe Paddington in particular because the ERVs there for the Brunel Building were pretty low. Or is that the same situation?
I think the situation is we'll be ahead of ERV nicely. The situation is [ with ROP ] we're 32% under offer. I'm also pleased to say we've got a lot of interest in the building.
Great. And in broader terms, are you still sticking with your ERV guidance?
No, we only call ERV guidance sort of half year, at the end of the year. If I recollect, it was plus 2, minus 3. And I stuck my neck out and said we'll be at the higher end, and I'm pretty happy with that.
Okay. Great. And then, just the last quick one. In the investment market, any evidence of prices softening either for the -- I guess, the prime long-let buildings or the shorter income stuff that can do with some development?
I mean, I understand 1 or 2 of the very large buildings, there is price resistance. But we're not finding the things we're looking at softening of the prices generally. We still see plenty of money available to invest in London real estate.
[Operator Instructions] The next question is from the line of Michael Burt with Exane BNP Paribas.
Just one very quick one from me. I can see that LTV to date has been ahead of ERV on a headline basis. I'm just wondering if there's been any change in the types of incentives you're seeing being offered to tenants. I know that they've been ticking slightly higher last year. Just wondering if you've seen them stabilize or there's been any other move there?
You're right. We did talk about it last year. And I think what you could say is, let's call it a tenured standard lease. A tenured standard lease generally across the market is 24 months. But I'd be a bit disappointed if we can't do a bit better on our projects.
[Operator Instructions] There are no further questions registered at this time. I would like to pass back to John Burns for closing remarks.
Thanks, everybody for calling in. If you have any questions, we're all going to be around. If not, have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for joining. You may now disconnect. Goodbye.