Derwent London signs up credit card giant to White Collar Factory as first quarter lettings jump
Derwent London said it has let two more floors at its White Collar Factory scheme in east London to credit card company Capital One.
The announcement comes as the developer shrugs off uncertainty in the market to post a strong quarterly update.
FTSE 250 constituent Derwent said Capital One has pre-let 29,500 square feet in the scheme's 16-storey tower on Old Street roundabout to house 200 new staff as well as its existing 50 London-based employees.
The deal means the White Collar Factory site, which comprises of the tower, an office campus, restaurants, flats and a public square, is now 48 per cent let to tenants including Adobe, engineering firm AKT II, and flexible office provider The Office Group.
Chris Newkirk, Capital One UK’s chief executive said the offices, in London's Tech City area "will help us become an integral part of the tech community in London and will play a pivotal role in our future success in the UK".
Capital One is the latest in a string of new lettings this year for Derwent after securing £13.2m of annual rent in lettings and pre-lettings in the first quarter, up 16.8 per cent compared with the same period last year.
On average lettings were completed 6.1 per cent ahead of December's estimated rental value.
Chief executive John Burns said: "In the lettings market, we have had a really great start. We are seeing demand out there which makes us comfortable with our development pipeline. For me that really drives everything."
He admitted that the investment market was more subdued, however, as buyers and sellers put the brakes on activity ahead of the EU referendum in June.
"People are sitting in the sidelines and they are waiting to see what happens with the EU referendum vote. Its just a question of sitting tight and seeing what happens," he told Morning Wire
Stamp duty for buyers of large commercial property also increased in April, causing further uncertainty for investors.
Burns played down the effect, saying the company had yet to see any effect on capitalisation rates – or the rate of return on an investment property.
Derwent London currently has over one million square feet of space under construction including the White Collar Factory, which completes later this year. In total, 400,000 sq ft is due for completion by the second half of 2017, 57 per cent of which is already pre-let.
Shares have risen by more than one per cent today to 3,307p.