Derwent London, the largest London-focused real estate investment trust (REIT), has now set out its timetable for major developments in Fitzrovia including its largest construction project to date which will see the district’s most famous advertising agency leave and herald another onslaught of building work to endure.
Later this year demolition and construction work will begin on 80 Charlotte Street — the offices of Publicis companies Saatchi & Saatchi and Starcom MediaVest.
“In the second half of 2015 we plan to start our largest development to date: 80 Charlotte Street W1 which lies in the heart of Fitzrovia,” says Derwent London in an announcement made this week.
Work will also start on a smaller building at nearby 53-65 Whitfield Street W1.
“We are currently negotiating with contractors, but we expect the total cost to be around £380m.” The project is due to be completed in the first half of 2018. Derwent says the estimated rental value (ERV) will be £23m a year.
According to Construction Enquirer Bam Construct, Brookfield Multiplex and Mace are all understood to be falling over themselves to grab the building contract.
Planning permission for this project was originally refused by Camden Council after local residents and community groups successfully argued that it failed to provide enough affordable housing and public open space. But it was later passed after Mayor of London Boris Johnson called in the application and gave it the go ahead.
The Publicis companies currently at Charlotte Street and Whitfield Street will leave Fitzrovia and move to new offices also owned by Derwent London. Saatchi & Saatchi will move to 40 Chancery Lane, and Starcom MediaVest Group will move to the Turnmill building in Farringdon.
Fitzrovia News understands that some of the smaller companies located within the Charlotte Street and Whitfield Street block are looking to remain in Fitzrovia but are finding it increasingly difficult to find premises locally due to the high rents currently being demanded.
Derwent say they will also go forward with the demolition and redevelopment of Copyright House in Berners Street — another controversial decision, this time passed by neighbouring Westminster City Council.
“Since the year end we have agreed a new 127-year headlease with the freeholder and started work on The Copyright Building, 25-33 Berners Street W1. The freeholder will receive a 12.5 percent ground rent as well as a share of profits above a 20 percent return. The development will provide 85,000 sq ft of offices and 20,000 sq ft of retail, which represents a 22 percent uplift on the existing area. The total cost is estimated at £117m and the net ERV is £6.8m. Completion is expected in H2 2017.”
Derwent also have two smaller projects already underway and due for completion later this year.
“The first will be the retail scheme at Tottenham Court Walk W1 where we are seeking to introduce a more interesting mix of retailers as part of regenerating 1-2 Stephen Street, and to bridge the gap with the higher value space around Tottenham Court Road station and Oxford Street.”
The net lettable area is 38,000 sq ft and Derwent is assuming a ERV of £2.3m pa. “One restaurant has been let securing £0.3m pa, and we are in negotiations on other units,” says Derwent.
The site was previously a colonnade with retail units occupied almost entirely by electronics shops.
The second project is a residential development at 73 Charlotte Street. “This will comprise 11,700 sq ft of private apartments in nine units, as well as 1,900 sq ft of affordable housing and 1,900 sq ft of offices.”
Perhaps after all that lot we can all enjoy a bit of peace and quiet.
So keen is Derwent London on demolition and redevelopment that last year they even won consent to destroy their own offices at 25 Saville Row in Mayfair and construct posh flats instead. But they now appear to have had a change of heart.
“We now have permission to redevelop our head office building into 52,400 sq ft of residential accommodation in 29 apartments and 5,600 sq ft of retail space. However, rising office rents and the relatively higher costs in developing luxury apartments mean that we are still considering our best options for the building.”
Or maybe Derwent’s hard-nosed men and women just can’t bring themselves to go through with it? It’s a shame the same sentimentality doesn’t extend to Fitzrovia.