Derwent lets east London property at £52 per square foot

FTSE 250 property investor Derwent London reported that it had let part of its east London property to a Cabinet Office service, in order for it to be nearer to city’s technology hub.

The first two floors of The White Chapel Building on Whitechapel High Street, formerly RBS' Aldgate office, have been let to the Government Digital Service, and the building is now 75% occupied with rents totalling £6.8m per year, after the company’s acquisition in December 2015.

GDS will pay an initial £2.8m rent per year, or £52 per square foot, which is above June’s estimated rental value, for a 10-year lease with a break in the fifth year. There will be a rent-free period of eight months rising to 18 if there are no breaks taken.

The government said GDS is going to support the transformation of public services across all departments and the property's location is ideally situated in the technology cluster of east London.

Ben Gummer, minister for the Cabinet Office and paymaster general, said with more money and improved offices, GDS could “accelerate their efforts to transform and improve public services right across the UK".

The White Chapel Building is currently undergoing refurbishment with the first phase due to finish in the final quarter of the year and the second phase, to refurbish the lower ground floors, due to start in 2017.

Derwent chief executive John Burns said: "The arrival of GDS is another great addition to The White Chapel Building which now hosts an exciting mix of occupiers across the tech and professional services sector. The spread of activities and commitment endorses our strategy of creating a mid-market rental product in this significantly improved area on the eastern side of the City and the Tech Belt."