Interview: Derwent’s vision for Moorfields Eye site

If Paul Williams had ever worried that London’s office market would struggle to recover from the Covid-19 lockdowns, he’s not letting on. The numbers from Derwent London’s first-quarter business update give the chief executive good cause for confidence – the developer has sealed £3.9m of new leases so far this year, with a further £3.3m of space under offer. So much for the death of the office. Derwent continues to vote with its balance sheet. In today’s update the company said that not only is it ready to get onsite at its next major scheme – the 137,000 sq ft Network Building office project on Tottenham Court Road, W1 – but it has exchanged contracts to buy the 2.5-acre Moorfields Eye Hospital site. The deal for City Road Island, EC1, will see Derwent buy the site from Moorfields Eye Hospital NHS Foundation Trust and UCL for £239m. “A lot of the major regeneration sites have been soaked up over the past few years,” Williams told EG as the deal was announced. “Two and a half acres in such a strong location is difficult to secure – there was a lot of competition to acquire the site and well-known names looking. London seems to have been in demand – there’s a lot of global money looking to invest.” Derwent knows the area well, given the success of nearby sites such as the White Collar Factory and Featherstone Building on Old Street, the latter of which completed last month and has 45,000 sq ft of its 125,000 sq ft under offer. Williams said the new scheme could house a 750,000-plus sq ft campus once the site is vacated in early 2027. “It will be an office-led scheme but there’s opportunity for other things such as life sciences,” he added. “Tech companies are coming back into town, Microsoft is looking for space, and over the long term we think it’s a great opportunity to create a fantastic campus. It hits all the Derwent sweet spots.” The company is working with architects at AHMM on a planning application that should be lodged within the next 12-18 months. “We want to create a destination where people want to go,” Williams said. “Think of when we created great locations and buildings like the Brunel Building over in Paddington and the White Collar Factory. There’s an opportunity for a whole mix of uses. And it won’t be just one building – it will be a number of buildings around a fantastic new public realm. We will make sure its amenity-rich and net zero carbon. We will come up with something really interesting, really magnificent.” And in the meantime, the chief executive and colleagues are bullish that their existing portfolio will benefit as London bounces back from the lows of the past two years. “Most of our occupiers are back three or four days and rents now are back to pre-Covid levels,” Williams said. “People are feeling excited by the power of London and like being back. I was in at the weekend as well, and it was just buzzing. I was even complaining about the traffic – which is a good thing to have to complain about.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews