Derwent Snags Tech Company For 100K SF West End Letting
Derwent London is in talks to lease almost the entirety of its £75M Network office building near Tottenham Court Road to tech firm Databricks.
The London-focused REIT is under offer to lease 100K SF to the company, which provides data and artificial intelligence services to companies, CoStar reported.
The building totals 139K SF, 134K SF of which is offices, with the rest retail. Derwent began building it speculatively to capture the rental growth that the West End is seeing. The building is scheduled for completion at the end of this year.
Grade A rents in the area are about £120 per SF, according to Devono data, and have risen 37% in the past five years.
Derwent said in a trading update in November that it was signing rents at its buildings that are 10% ahead of where they were at the start of the year.
On its next phase of development projects, which totals almost 500K SF, it is targeting profit on cost in the range of 15% to 25% and an average ungeared internal rate of return in excess of 10%.
The company has a market capitalisation of £2.1B, and its shares have been broadly flat over the past 12 months.
