Hi, Emily, how are you?

 

Hi. Lovely to see you.

 

I wanted to ask you about the new members lounge you've opened at Old Street and ask you what these are, from first principles, and why you're doing them?

 

Yeah, of course. So, the one that just opened in Old Street is actually the second of our two lounges. And those are the lounges that form part of our overall DL member offer. They've come about I suppose through us demonstrating our belief in the importance of amenity and service in the real estate industry. So, we really wanted to take our role as landlord a little bit further than traditionally the market has done. The lounges themselves are physical spaces which are open to any individual that works in any of our buildings. They comprise touchdown workspace and café spaces, which you can come into for free and use at your leisure. And they also comprise bookable meeting rooms, and private hire space, which you can hire by the hour.

 

And how do you access them? Do you use a card or something, or a QR code?

 

It's all through the Derwent app. As an occupier or tenant of the building, you have access to our app, and that app gives you an access card, effectively, to the lounges. They are all manned with our staff on the door anyway, so should there be any issue then there's people to assist.

 

So, this is the second lounge. What's the feedback been like for the first one you've had in operation, which I think was in Fitzrovia, wasn't it?

 

Yes, we opened the first in Fitzrovia two years ago in 2021. We'd been working on it through COVID, which had its challenges, but was actually good in terms of launching it on the other side. The feedback's been really positive. I mean, there's a reason why we picked the locations we have. Our core village in our portfolio is Fitzrovia, where we have our largest village, I should say, where we have approximately 1.7 to 8 million square feet if you include Soho Place. So: that amount of people within a 10-minute walk of 78 Charlotte Street, which is where the lounge is. Similarly, in Old Street the lounge is at the bottom of the building we recently completed. But within 10 minutes’ walk of that, we've got White Collar Factory, Oliver's Yard, Morelands, the Tea Building. So again, we've got a lot of space really very close to those two locations. So that's why we've chosen those spaces to open the physical spaces in the lounges.

 

And you have spaces for events as well, and talks etc. What's been happening in the one that's been open thus far?

 

Thus far, because it's only been two weeks, we've only had a member welcome drinks, that's all. But the working model, if you like, is that we hold one event per month in the space, which could be for example, in 78 (Charlotte Street) we've just done a wreath-making event as it was close to Christmas. We've done dance lessons, we've done yoga mornings, breakfasts. We've done speakers, guest speakers to talk - it's been really varied. And in DL 28, which is the one more recently, it has a multifunctional room where we're running more regular fitness classes. So just yoga and Pilates effectively, which is early morning, lunchtime, or evening classes.

Have you got plans to roll any more of these out? Or is this going to be it? 

 

No immediate plans at the moment. We've just opened the second one. So, between the two of them, they cover a large proportion of our portfolio. It'll be another couple of years and bedding those in and seeing where we get to and obviously listening to and responding to the feedback, and taking it from there. 

 

So, with this being our first issue of New London Weekly of the year, I wondered if I could ask you about how you've seen market conditions, certainly over the last year, and how you project market conditions will be over the coming months and years. What was '23 like for you? And what do you expect '24 to bring?

 

There's no denying that 2023 has been a challenging year and another challenging year off the back of a few before that, I would say, with everything that's been going on. It really has been the macro leading the way, you know, with obviously tragic events across the world happening at the moment, pandemics prior to that, etc. So, we've really been bedding down this year (2023). As it happens operationally, as a business, we've had one of our strongest years from a lettings perspective; we've done over £28 million worth of new lettings, and had a very busy year from an asset management perspective. But obviously, the macro and the sentiment piece are real and is there. So it's been a challenging year, and encouragingly we've seen the occupier market, i.e. businesses out looking for space, really come back to life, particularly in the second half of this year, which is always a barometer that we look at closely, obviously. In terms of looking ahead, I think, ‘optimistically cautious’ is probably where I would say we are for the next year. All of the market statistics and everything from a London market perspective are pointing to what should be another good year of activity. We've got very limited supply, particularly in the sub-markets of London, where we operate. And, you know, good levels of demand. So, I think, with the macro obviously in mind we're taking that optimistically cautious look at next year and carrying on. We've got two sites active, building out 25 Baker Street, and Network Building, going really well. And a large proportion of Baker Street is already pre-let to PIMCO and Moelis and Network Building delivering and 25 is moving really well through the development team. So yeah, we're, we're looking forward and sort of carrying on next year!

 

Well, good luck with the year ahead. And I guess things like these lounges are a little sort of differentiator for you, are they?

 

Absolutely, yeah. And that's it. It's a word we use a lot here. And yeah, the Derwent differentiator and how we can continue to lead the way and stay ahead is what we're always looking to do.

 

Brilliant. Thank you for your time.

 

Thanks very much. 

 

Cheers, Emily.

 

Cheers, Bye bye.