Some 9.2 million sq ft of office space is currently under construction in central London, Deloitte London’s latest crane survey shows.
According to building.co.uk, despite the fact a lot of new buildings are on the way, office space will remain in short supply for the next two years, Deloitte says. Moreover, although office development levels are on the up compared to last year, activity remains below the long-run average.
Seven million sq ft of Grade A office space will be delivered this year – the largest volume seen since 2003. However, around 45 per cent of the office space under construction is already let, meaning the amount of space actually hitting the market will be a lot lower compared to previous years, reports theconstructionindex.co.uk.
Anthony Duggan, partner and head of research at Deloitte Real Estate, explains that it won’t be until 2017 or 2018 until delivery starts to pick up, as the ongoing demolitions will take some time to turn into completed schemes.
“Developers that started office development schemes at the first signs of economic recovery in 2011/12 are now reaping the rewards as their schemes complete at a time of reducing availability, increased tenant demand and rental growth,” he says.
“There is currently just ten Grade A buildings in central London that are available to let as a whole, and only five which can offer an occupier 100,000 sq ft of space or more, which is severely limiting choice.”
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