LONDON (ShareCast) - (Sharecast News) - Derwent London announced the acquisition of the remaining 50% stake in its 50 Baker Street W1 project from joint venture partner Lazari Investments on Tuesday, for £44.4m, equating to £370 per square foot of the consented floor area.

The FTSE 250 company said the deal represented a 4.2% net initial yield based on the current passing income of £2m per annum, attributable to the acquired 50% share.

Planning consent for the development, which would nearly double the site's existing footprint to around 240,000 square feet, was granted in August.

Detailed design work was currently underway, with Derwent now holding full control of the project.

The decision followed strong pre-letting activity at the adjacent 25 Baker Street W1 development.

Progress was also being made on renegotiating headleases with the Portman Estate, the freeholder of 50 and 64 Baker Street, to facilitate the scheme's delivery.

"West End vacancy remains low and demand from high quality occupiers across a broad range of business sectors continues to outpace supply," said chief executive officer Paul Williams.

"Underpinned by our confidence that the property cycle has inflected, we believe now is the time to acquire well-located regeneration opportunities.

"Our decision to take full ownership of 50 Baker Street reflects this and marks the conclusion of a successful partnership with Lazari."

At 0852 GMT, shares in Derwent London were down 0.1% at 2,080p.

Reporting by Josh White for Sharecast.com.

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