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Derwent mulls development slowdown on Laing O'Rourke Brunel Building

Derwent could slow development down on its £113m Brunel Building being built by Laing O’Rourke in London.

The developer said it would monitor whether “to continue at the current pace, slow down or reduce development expenditure” on the project over the next few months.

Demolition work has finished on the 240,000 sq ft scheme in Paddington, with groundworks and the basement box expect to complete in H2 2017.

Derwent said a decision on whether it slows down development altogether did not have to be made until later this year.

Other major projects by the developer include its £225m 380,000 sq ft 80 Charlotte Street scheme.

Both projects had been targeted to be delivered in 2019.

Derwent was commenting in its half-year results for the six month period to 30 June 2016.

The group said the EU referendum had caused “increased market uncertainty” and led to “a hiatus in many property transactions”.

However, it said it was too early to gauge what the impact of the vote to leave would have on the commercial market.

“It is encouraging that, in subsequent weeks, activity has started to return to the markets, as evidenced by our lettings,” it added.

Derwent chairman Robbie Rayne said: “It is early days since the EU referendum but London remains a major global city with significant attractions and potential for the future.

“Derwent London has a flexible and dynamic business model and a strong balance sheet with low leverage, which enables us to respond to changing economic conditions.”

The developer said it had four major developments completing in 2016/17, which totalled 673,000 sq ft and are 58 per cent pre-let, with capital expenditure to complete of £84m.

Developments completing in 2019 total 620,000 sq ft with capital expenditure to complete of £338m.

 

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