DERWENT London has snapped up an office block near Old Street’s Silicon Roundabout for £30m as it looks to capitalise on growing demand for space in the area from expanding technology firms.
Chief executive John Burns said the 61,000 square feet building at 1 Mark Square in Shoreditch was “right in the hotspot location” in London’s “tech belt” from Whitechapel to Kings Cross.
The growing technology sector and government initiatives to market the east London area as a home for start-ups has helped Derwent and other developers such as Helical Bar tap into a need for supply of new office space.
Such is the demand that in March Derwent announced plans to kick-start work on its huge White Collar Factory office building next to Old Street roundabout early next year before securing a tenant.
“We are now seeing better rental growth in the tech belt than we have in the West End,” Burns told City AM.
Reporting its half-year results yesterday, Derwent said it had an excellent start to the year with net asset value (NAV) per share up by 8.9 per cent to 2,054p over the six months to 30 June and by 16 per cent on the same time last year. This was fuelled by a 2.6 per cent rise in underlying rental values and by signing a record level of pre-lets on its pipeline of developments.
Derwent recently sold its remaining share in 1-5 Grosvenor Place to a Hong Kong hotelier for £132.5m – a huge 70 per cent premium to its December valuation – also boosting NAV.
The group increased its dividend by eight per cent to 10.75p year-on-year.