Landlord Derwent London's boss says the office is "far from dead"

The chief executive of property developer Derwent London has said the office “is far from dead”, as he outlined expectations for when more people will return to headquarters.

Paul Williams told the Evening Standard that occupation levels across his firm’s London office blocks is currently around 15%. He predicts that will rise to 50% by the end of the year, before improving further in 2021.

Like other landlords, Derwent London has seen its buildings underused since scores of people started working from home for the Covid-19 lockdown in March.

There are industry concerns businesses will look to allow people to work away from the office longer term.

Williams expects there will continue to be some home working, but added that: “Companies still need to bring their staff together, for the collaboration that social interaction brings, to build culture, to attract and retain talent and to have a physical embodiment of their brand. There is no substitute for building relationships with colleagues and clients in person.”

However, he also said: “We expect rising unemployment and business closures will see the London office vacancy rate rise which, in turn, may put pressure on office rents. However, we believe our better quality lower rise space, located in West End and Tech Belt mixed use locations that attract a broader spread of occupiers, will be relatively resilient.”

Derwent’s first-half rental income rose 5% to £97.8 million and it upped the interim dividend by 4.8% to 22p per share.