A new report by Deloitte has revealed office construction in London is at a ten-year record high. The London Office Crane Survey revealed that twenty-two new schemes will begin construction in the next six months – almost double the office space construction begun over the previous six months.
Over a million square feet in the City of London and a further 500,000 square feet in ‘tech city’ cover the majority of new projects, which include 10 new offices in the city centre. While overall office construction is actually down by 17% on the previous six months, the number of completed projects reaches 3.7million square feet.
Steve Johns, head of City leasing at Deloitte Real Estate, explained: ‘fifty-eight per cent of this space was leased before completion, demonstrating the strength of occupier demand. Similarly, of the total 7.7 million sq. ft. of space under construction, 41 per cent is already let. Despite a healthy pipeline of activity, 2015 is likely to deliver the lowest volumes of space in 20 years.’
The amount of new office space in construction reflects a growing economy, as demand for business space continues. Johns continued: ‘with occupier demand expected to remain strong we foresee further increases in pre-letting activity, and demand for the best space to exceed new supply for the next three years. Nevertheless, with over five million sq. ft. now being demolished – a rise of 18 per cent in six months – developers are racing against the clock to deliver buildings while new supply remains relatively low.’
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