Development Securities has announced it is pressing ahead with the second phase of its speculative office development in Hammersmith, west London.
The announcement came as the developer reported a pre-tax profit of £8.1m for the six months to 31 August 2013, compared with a loss of £700,000 in the same period last year.
However, its revenue fell to £32.5m in the six months to 31 August 2013, from £56.7m in the same six months in 2012.
Development Securities chairman David Jenkins said the business would focus on large-scale office developments as the economy shows signs of recovery in and around central London.
The developer completed the first phase of its 275,000 sq ft speculative scheme in Hammersmith town centre in June 2013.
With 58 per cent of the 110,000 sq ft 10 Hammersmith Grove building under offer, Mr Jenkins said the developer is “encouraged by the level of interest in the remainder of the space”.
“Given our progress, we are now priming the second phase, 12 Hammersmith Grove, a 165,000 sq ft grade-A office building for commencement in early 2014,” he added.
The second phase of the speculative development will be forward-funded with an institutional investor before construction starts.
But Mr Jenkins raised concerns about economic recovery outside of the capital, where he said productivity remains 5 per cent below its pre-recession peak.
“London, with its population growth and status as a leading global city, has benefited from positive GDP growth for some time now and, with a steady influx of foreign capital and further infrastructure improvements, this seems set to continue.
“Outside of London, however, concerns remain as to whether this incipient economic recovery is sustainable. Productivity improvement, which is important if we are to raise UK living standards and move to a sustainable cyclical recovery, is still not in evidence,” he said.