Derwent London sees occupancy levels improve at its office buildings

·2 min read
Derwent London is working on a new office project at 19-35 Baker Street (Derwent London)
Derwent London is working on a new office project at 19-35 Baker Street (Derwent London)

Office occupancy at Derwent London’s buildings is at its highest level since the start of 2021, the landlord’s boss said on Thursday as the company reported on new lettings.

The FTSE 250 property developer and landlord has seen sites significantly underused since the initial work from home if you can guidance came into effect in March 2020.

The City and West End have been quiet as current guidance is to work from home if you can, but some people have been heading into offices if they need to, and for only part of the week in cases.

Derwent chief executive Paul Williams said that on average in May so far, occupancy stands at around 17% at the firm’s 83 properties in the capital.

That is up from close to 5% at the start of the year. During the pandemic, levels were as low as 3%, and improved to around 30% in September when restrictions had eased, and ahead of the third lockdown starting.

Williams gave the update to the Evening Standard as the firm reported that £1.3 million of new lettings have been achieved in the year to date, together with another £4.3 million under offer. That is mainly for office space.

Across the capital a number of companies are looking to reduce space as they prepare to embrace a mix of home and office work when lockdown rules ease.

But Williams today said: "We are seeing a marked increase in activity across our portfolio as London is emerging from lockdown and we now have £5.6 million of lettings completed or under offer. Our occupiers are telling us that they are keen to return to their offices as the economy bounces back."

The boss thinks there will be more hybrid working, but that people want to be in offices for reasons such as training and development of staff.

Williams added: “The old days of banks of desks is going… firms want open, collaborative space”.

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