London office construction hits seven year high
Office construction in central London has grown by 18% in six months and hit a seven year high according to a survey by Deloitte Real Estate.
The London Office Crane Survey recorded 26 new office schemes, with total space under construction in central London now at 11.1m sq ft, spread across 77 schemes.
Will Matthews, head of research at Deloitte Real Estate, said: “We expect that just 3.3m sq ft of space will complete in 2015, the lowest amount for three years.
“Looking ahead though, the development pipeline for 2017-19 is filling up as work commences on new schemes. We have also recorded a further 24% upsurge in sites being demolished and readied for construction, meaning early indications are that space completed in these years will exceed the long-run average. Developers will be mindful of the fact that this rise in office construction comes at the same time as high levels of residential and infrastructure development, increasing competition for available construction capacity.
“Ultimately the rise in office development recorded in our latest crane survey comes after five years of relatively low delivery, which has exacerbated the current shortage of available Grade A stock. This new space will not be completed for some time and we forecast further upward pressures on rental levels in the short term.”
Leasing of buildings under construction is dominated by technology, media and telecoms firms, taking 44% of the space. This is followed by the financial sector taking 27%.