Derwent sells Covent Garden’s Davidson Building for £66m as third quarter lettings soar
Derwent London's Davidson Building in Covent Garden has been snapped up by US real estate firm Cornerstone for £66.2m, the developer said yesterday, as it reported a surge in third quarter lettings.
The company bought the office building and redeveloped it in 2003, keeping the Edwardian façade on Southampton Street. It was named the Davidson building after the late architect Ian Davidson, who designed it.
Derwent chief executive John Burns said the company took advantage of heated demand in the commercial property market to sell the building, which is fully to tenants including energy supplier First Utility, with bids going into a second round.
In total it has agreed on £102m of sales in the fourth quarter, including Portobello Dock in west London, which is home to Innocent Drinks' headquarters and restaurant Dock Kitchen.
Burns said despite some economic uncertainty, the central London lettings market remained strong, with no let-up in demand from companies seeking out space to house their expanding workforces.
He added that firms, had become increasingly "footloose" and willing to move out of traditional strongholds such as Soho in search of better value rents, talent and more interesting office space.
The company secured 171,900 square feet of lettings in the third quarter of the year, taking total lettings for the year to 501,500 square feet and generating £26.2m of annual income.
"The current year is our best ever for lettings. We have also successfully recycled some more mature assets into several major opportunities and the group's development activity demonstrates confidence that the high level of occupier demand for our product is set to continue," Burns said.
Derwent currently has 398,000 sq ft of space under construction, including its 293,000 sq ft White Collar Factory scheme on Old Street roundabout, which is due to complete next year. The building, which is targeted at digital and creative firms, is 29 per cent pre-let.
It will start work on a further 620,000 sq ft by June 2016, including the redevelopment of the former Saatchi & Saatchi building at 80 Charlotte street in Fitzrovia, which is expected to get underway before the end of the year.