Developer says 25 Baker Street and Network Building jobs to complete this year

London office developer Derwent said market confidence went into reverse in the final quarter of last year amid wider concerns about growth and inflation.

The firm behind Laing O’Rourke’s scheme at 25 Baker Street, due to complete in the first half of this year, and Kier’s Network Building job, set to finish towards the end of 2025, said demand for space had “risen significantly” last year.

But it added: “The investment market was subdued last year. Sentiment improved in the first half, with inflation and long-term interest rates reducing, optimism leading up to the General Election and UK GDP forecasts being revised upwards. However, Q4 saw a reversal in sentiment as concerns around growth and inflation re-emerged.”

derwent's 25 baker street scheme

Laing O’Rourke is building a new office scheme at 25 Baker Street that will complete in the first half of this year

Chief executive Paul Williams said London would always remain busy despite wider market confidence: “London is a leading global city, attracting a broad occupier base. Business leaders across sectors want their teams in the office and London’s workplaces are busy.”

Derwent’s medium-term pipeline includes redeveloping a 133,500 sq ft listed corner block on Oxford Street called Holden House, drawn up by DSDHA, which it said would start in the second half of this year. It is also planning to start on a mixed-use scheme called 50 Baker Street, designed by AHMM, by next summer.

Its longer term plans include its Old Street Quarter scheme, also drawn up by AHMM, which involves revamping the site of the Moorfields Eye Hospital and the UCL Institute of Ophthalmology near Old Street tube station.

The firm paid £239m for the site three years ago but it won’t get possession until a replacement eye hospital, called Oriel which is being built by Bouygues, is finished. This is due to happen in 2027 with Derwent beginning work the following year. It added: “Our studies suggest there is potential for a significant mixed-use campus development, potentially incorporating both office and ‘living’ components.”

In annual results for 2024 out today, Derwent said gross rental income last year was up 1% to £215m with its property portfolio valued at £4.9bn.

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