There's now 14.8m sq ft of offices being developed across the heart of the capital.
What’s the latest?
Office construction in central London has hit the highest level since 2008.
Development started on 40 office schemes between the start of April and the end of September, adding 2.8m sq ft of space to the heart of the capital.
It brings the total amount of office space now being built in central London to 14.8m across 120 projects. That’s 4% more than six months ago.
The research was revealed in Deloitte Real Estate’s London Office Crane Survey, which measures the volume of brand new and significant office refurbishments of 10,000 sq ft or more.
Why is this happening?
It is major office refurbishments, rather than the construction of new-builds, that is fuelling this latest wave of development activity, according to Chris Lewis, head of occupier advisory at Deloitte Real Estate.
He said: “Refurbishments account for 28 out of the 40 new construction starts [on site] and highlight the opportunity that developers can deliver into a market that still has low levels of available office space.”
Above: office to rent on Goswell Road in London's Clerkenwell
Who does it affect?
Businesses are increasingly adopting a cautious approach to offices to rent. And with the total volume of existing offices let so far in 2016 down 27% on last year, there is a greater choice of space and deals for firms seeking new space.
Lewis said: “With a marked slowdown in wider occupier demand and increasing levels of supply in the short-term, the balance is now moving in favour of London’s office occupiers.”
Sounds interesting. What’s the background?
Of the 14.8m sq ft of office space under construction across 120 projects in central London:
- 8.8m sq ft is in the City of London
- 1.7m sq ft is in the West End
- 1m sq ft is in the Docklands
- 800,000 is in on the South Bank
- 500,000 sq ft is in King’s Cross
- 400,000 sq ft is in Paddington
Will Matthews, head of insight at Deloitte Real Estate, explained: “2015 and 2016 have been the most active years for new developments in two decades, with 148 schemes totalling 15m sq ft starting construction.
“Many of these schemes are now nearing completion, meaning that almost 7.5m sq ft of offices are due to be delivered between now and 2017.”
But it’s not all good news. The survey also revealed that new office construction activity fell 42% between the start of April and the end of September compared with the previous six months.
Matthews added: "The expected increase in completions (of office schemes under construction), combined with macroeconomic uncertainty, is leading some developers to defer the start-date of future schemes.
"Nevertheless, demolition levels have increased by 12% over the six months, indicating that other developers are continuing to press ahead."
- The development of offices in central London has hit an eight-year high.
Construction has started on 40 office schemes over the past six months alone, adding 2.8m sq ft of space to the heart of the capital.
The total amount of office space now being built in central London is 14.8m across 120 projects.