Despite completions surge, total office space being constructed is 6% down
Office completions in London during the past six months reached a 13 year high - but the amount of new build going up went down.
London saw 3.9 million sq ft of new office space complete in the period but the latest Deloitte crane survey - which covers seven major office markets in the capital - said that the amount of office construction in central London has hit 13.9 million sq ft - down from the 14.8 million sq ft recorded in the previous half year.
The survey, which runs for the six months to the end of March, said 28 new starts had been made during the period - down on the 40 made in the six months to the end of September. New builds accounted for half of the new starts.
Despite the falls, Nigel Shilton, managing partner at Deloitte Real Estate, said: “The decrease in overall volume of space under construction could suggest that developers have slowed down, yet this is more a result of timing and two years of elevated levels of construction completing rather than developers holding off.”
He added that demolition levels remained high at 7.9 million sq ft, which he said echoed the opinions of contractors who were expecting a rise in workloads over the coming year.
Shilton said: “Looking at the development pipeline, we forecast around 39 million sq ft to be delivered by 2021. Very few schemes have been cancelled, highlighting continuing developer confidence.”
The City saw a start on 10 new schemes with three-quarters of them new builds with PLP’s scheme at 22 Bishopsgate accounting for 40% of the volume of all new space started.
The West End recorded another decrease in construction activity, down 27% in the past six months following a 25% fall last time.
But the survey said work in Midtown has recovered to increase by 9% following a 20% fall while work in Southbank, where Ian Simpson 50-storey One Blackfriars is on site, was up by 6%.
The survey also said that the financial sector is the biggest consumer of leased space accounting for 46% - the equivalent of 2.7 million sq ft - of the space under construction with the legal and corporate sectors both holding a 13% share. But the share of space taken up by firms in the technology, media and telecom sector slumped to 21% from 33% last time.
Other central London areas covered by the survey are King’s Cross, Docklands and Paddington.