The year began with the letting of the remaining office space at the 10,000m² Qube building in Fitzrovia. EDF, one of Europe’s largest energy companies, took 2,900m² at a rent of £1.5m pa, while ScanSafe, a subsidiary of technology giant Cisco Systems, took 600m² at £0.3m pa. Letting activity continued, leading to the conclusion of our 100th letting for the year in December. This came with the arrival of Innocent Drinks, a leading fruit smoothie company, at Portobello Dock, our urban regeneration development spanning the Grand Union Canal in west London, which was recently shortlisted for the World Architecture Festival Awards.

On our larger projects, we completed the elegant 4,400m² new-build Charlotte Building, Noho, in October. Letting activity in this sophisticated building, designed by award-winning architects Lifschutz Davidson Sandilands, was swift and, by the year end, Unanimis, one of London’s largest digital advertising networks, and Icon Entertainment had taken 1,200m² and 600m², respectively, at a combined annual rent of £0.9m.

Our smaller refurbishments also proved popular with tenants. At the Tea Building, opposite the new Shoreditch High Street railway station, which is scheduled to open in June 2010, we reconfigured a number of units and attracted a range of dynamic occupiers including Oakley, a high-fashion sunglasses company, and the private members’ club, Soho House. Elsewhere, we refurbished the entire 1,100m² building at 45-51 Whitfield Street, Fitzrovia, and pre-let it to Target Media, one of the fastest growing independent media agencies in the UK.

Tenant demand has remained buoyant since the year end. Two further lettings have been signed at the Charlotte Building: Converse (a division of Nike) and Brandopus have leased 1,400m² and 500m², respectively, at a total rent of £0.9m pa. A single floor remains available and there is strong interest in this space. To date, we have concluded 13 lettings in 2010 at a rent of £1.4m pa with a floorspace of 4,300m². Additionally, over 4,000m² of space is under offer at a rent of approximately £1.1m pa.

The low rental characteristics of our portfolio enabled us to capture important reversion through rent reviews and lease renewals. Over the year, 41 rent reviews were settled, at a 15% uplift, adding £1.2m pa to the group’s contracted rent roll. Lease renewals were also profitable, with 38 transactions increasing the annual income from £1.5m to £1.8m – an 18% uplift.

At the start of 2009, just under 10% of the portfolio’s annual contracted rental income was subject to lease expiries or break options during the year. We enjoyed a high retention rate thanks to our intensive asset management: in total, 66% of this income was retained and 18% re-let prior to the year end. Of the balance, 24% has subsequently been let or is under offer.

Minimising our voids was a key asset management target during the year. This was achieved, with the vacancy rate remaining low, and relatively unchanged, throughout 2009. The group’s vacancy rate by rental value, measured as space immediately available for occupation, started the year at 3.8%, rose to 4.2% in the spring before declining to 3.6% by the year end.

This reduction occurred even after the completion of the Charlotte Building, which was reclassified from ‘projects’ to ‘available space’. By floor area, the group’s year end vacancy rate fell from 4.0% to 3.8% over the year, significantly lower than the CBRE central London year end rate of 7.2%, or 6.8% for the West End. Looking ahead to the new financial year, the completion of the highly efficient, AHMM-designed Angel Building during the summer of 2010 could potentially increase the vacancy rate to 6.8% by rental income or 6.2% by floor area.

Income collection and tenant monitoring was robust during 2009. Rent collected within 14 days of the quarter day averaged 96% over the year, a similar level to 2008 and a strong performance in the context of the economic climate. This was above our key performance indicator target of 95%.

Tenant defaults remained low, with only 13 tenants going into administration during the year.