Big Yellow has won a planning appeal for a 132,000 sq ft storage centre and 114 flats in Wapping, E1.
The self-storage firm said it expected the £56m facility would deliver net operating income return of approximately 9%.
Around £36m will be spent on construction.
Demolition of the existing buildings on the site will start shortly. A temporary 31,000 sq ft store, currently on site, will be closed when the development is complete.
Chief executive Jim Gibson said: “This is an important planning consent that has been secured in a strategic and rare central London location that we are confident will deliver a meaningful contribution to our revenue and earnings in due course.”
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