Derwent builds on demand for London office space

Office developer Derwent London has pledged to press ahead with its development programme on the back of solid financial results.

Announcing a 10% rise in net asset value (NAV) for the first six months of this year, Derwent said its core market of the West End had performed well despite growing uncertainty in the wider financial market.

It said it had five main projects on site and expected to begin work on two further schemes in the second half of the year – a 21,000 sq ft upgrade of Central Cross W1, subject to planning, and a 33,000 sq ft refurbishment and extension of the Morelands buildings in Clerkenwell.

Looking ahead further, Derwent said it had proposed projects totalling 435,000 sq ft due to commence in 2012 and additional projects amounting to 1.7m sq ft earmarked for 2013 onwards.

These include new schemes such as a 148,000 sq ft residential scheme at Riverwalk House in Victoria and a 277,000 sq ft mixed use scheme- in collaboration with Crossrail – above Tottenham Court Road station.

“Throughout the first half, conditions in the central London market were favourable, supported by investment and tenant demand,” Derwent said in a statement. “However, recent concerns over the weakness of the global economic recovery, the levels of sovereign debt ain Europe and the US budget deficit have made the outlook for the second half more uncertain.

“We are mindful of the risks that this presents but have no significant exposure to the City core which is likely to be affected most by these influences. In addition, with our strong balance sheet, adaptable development pipeline, low capital values and affordable rents, we are well positioned to respond to events appropriately.”