Member Article

Derwent earmarks £326m as two major developments in London get go ahead

Property developers Derwent London are to forge ahead with two of its biggest current developments in the capital after setting a new record for lettings despite Brexit worries.

The firm announced in a business update this morning that lettings up to Q3 this year had already surpassed the full year 2015, reaching 495,300 sq ft so far in 2016 securing £28.3m pa of rental income.

This has been matched by £135m of property disposals this year which Derwent claimed was in line with December 2015’s book values.

As a result of the developer’s ‘positive lettings and sound financial base’, Chief Executive John Burns said that Derwent would now be progressing with two major developments in Paddington and Fitzrovia.

Setting aside a further £326m for the two projects, Derwent will proceed with its 240,00 sq ft Brunel Building development in Paddington and its refurbishment of the former Saatchi Building at 80 Charlotte Street in Fitzrovia.

Work on the Fitzrovia building has been in the pipeline since 2013 and will see contractor Multiplex deliver 336,000 sq ft of office, residential and retail space and 31,000 sq ft at the development which formerly housed ad agency Saatchi and Saatchi.

Meanwhile, doubts had persisted about whether Derwent would go ahead with the 16-storey Brunel Building property in Paddington, which is set to be delivered by Laing O’Rourke, after fears that office take up would drop off sharply following June’s Brexit vote.

John Burns, Chief Executive Officer, commented: “We are encouraged by our letting and disposal activities since June. Despite uncertain market conditions, our brand of good quality space at mid-market rental levels continues to attract occupiers.

“Given our positive lettings and sound financial base, we are progressing our major developments in Paddington and Fitzrovia, which are both due for completion in 2019 and expected to deliver attractive returns.”