Derwent’s Paul Williams on ‘restocking the hopper’

Derwent London chief executive Paul Williams is feeling positive about the future following last year’s £420m spending spree to refocus the company’s portfolio on large developments ripe to deliver amenity-rich, environmentally friendly, design-led workspaces. While you’d expect the boss of a London-focused offices developer to be extolling the virtues of the office, Derwent’s results for the year ended 31 December 2021 provide evidence to support his positivity. Over the course of the year, Derwent completed £13.7m of new lettings across its portfolio at estimated rental values 3.6% higher than in December 2020. The firm has been gradually increasing it guidance on ERVs, upgrading them from 0% to -5% last year to 0% to +3% for 2022. “Our forward ERV guidance has improved through the last 12 months,” says Williams. “We estimate our ERVs will grow in the range 0% to +3% in 2022 as an average across our portfolio. As the economic recovery gathers pace, we expect this will translate into sustained future growth. With continuing strong investment demand, we expect investment yields to remain firm.” Williams seems to have plenty of reason to be cheerful and is almost gleeful when he talks about the “super-sites” the firm has acquired to deliver to the market over the next few years. “We’ve really stocked up with some great Derwent schemes for the future,” he tells EG. [caption id="attachment_1126300" align="aligncenter" width="847"] Soho Place, W1[/caption] Those super-sites include the 285,000 sq ft Soho Place, W1, on the corner of Oxford Street and Charing Cross Road, directly above Tottenham Court Road station, which has been prelet to Apollo Group and G-Research, and the Featherstone Building, EC1, a 126,000 sq ft development in the heart of London’s tech belt. Both are due to complete in the next few months. Other projects include the redevelopment of 19-35 Baker Street, W1, on which work began at the end of 2021 and where Derwent plans to increase its floorspace by 108% to 298,000 sq ft; the Network Building, W1, where it has dual planning consent for 137,000 sq ft of offices and 112,000 sq ft of lab-enabled life sciences space; and Bush House, WC2, where Derwent has submitted plans to increase its floorspace from 103,700 sq ft to 130,000 sq ft. Add to that Derwent’s selection in December 2021 as preferred bidder for the 2.5-acre Moorfields Estate, EC1, and it is clear to see why Williams is feeling a bit excited about the future. “We’ve restocked the hopper,” says Williams, “and we’re excited about new projects.” [caption id="attachment_1126296" align="aligncenter" width="847"] The Featherstone Building, EC1[/caption] The volume of new office space coming online at a time when the future of offices is still very much a topic of debate doesn’t concern Williams. “Our own experiences show that, as businesses return to looking to the future, there is a clear recognition of the importance of the role the office plays in bringing people and teams together to enhance communication, mentoring, creativity and, importantly, productivity,” he says. “People have a choice, so they want to be in a cool, great building,” says Williams, clearly describing what a Derwent building means to the developer. With more than 700,000 sq ft of schemes in various stages of development and a pipeline that could add a further 1.7m sq ft of space, is Williams on the hunt for even more “super-sites”? “We have plenty to do, but if something interesting comes up where we can add our special touch, we would definitely look at it,” he says. To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews Photos: Portrait © Westminster Property Association; building images © Derwent London