The results of research conducted by Deloitte show that office construction in Central London has hit a four year high. The London Office Crane Survey, one of the leading monitors of office development in the capital, reports that 9.7 million sq ft is currently under construction, three times the level of activity in 2010.
The Walkie-Talkie (20 Fenchurch Street) under construction
The focus of the new development, which includes the Walkie-Talkie and the Cheesegrater, is in London’s prime markets but there is also activity in some of the capital’s office submarkets.
Southbank leads this new wave of development with 982,000 sq ft under construction followed by King’s Cross with 800,000 sq ft and Midtown with over 700,000 sq ft.
The survey also shows that take-up of this space has reached 3.2 million sq ft – or 33 per cent – demonstrating that businesses are confident about the future and are prepared to act now to secure new accommodation.
The developers are also benefiting from a five year low in available Grade A office space which is generating demand and tipping the market back in the favour of landlords.
Anthony Duggan, partner and head of research at Deloitte, said; “The increase in construction and leasing transactions recorded in the latest survey reflects the improving sentiment being felt in the London office market.
“Importantly, a number of ‘bellwether’ vacant schemes across London are now transacting, reducing the ability of potential occupiers to sit back and wait for conditions to improve. This is likely to add a little more urgency into the leasing market over the next few months.”
He concluded by saying that, barring any major economic shocks, the rising optimism among businesses – as revealed in Deloitte’s recent CEO Survey – is likely to lead to increased activity in the market with more new developments breaking ground.
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