Glenigan highlights growth trend for offices
UK office development has been on a firm growth trend over the last three years, according to a report from Glenigan. A surge in starts in the third quarter of 2014 lifted growth for the year above earlier expectations to a rise of 20%. Glenigan reports that projects remain buoyant and that it expects further expansion in 2015.
Looking further back, there was a 12% rise in the value of underlying project starts in 2013, following a 39% rise in 2012.
It is the early-stage demolition and site-preparation specialists that are likely to have enjoyed 2014 the most. The rise in activity is expected to spread to main contractors and other specialists this year as work on projects on site gather momentum.
In 2013, London saw a pause in the rise of project starts, with the value of underlying starts rising by 4%, well behind the UK average of 12%. Scottish cities were the star performers.
However, a raft of high-profile schemes supported a further upturn in activity in this sector in London last year, including ‘The Scalpel’, where work started on site last summer.
Following a pre-election dip in project starts, the flow of schemes is forecast to strengthen during the second half of the year. There is a number of major consented schemes with construction values in excess of £100 million awaiting final investment decisions, pre-let tenants or a cost-saving redesign in the case of ‘The Pinnacle.’
Sector activity is expected to remain firm over the medium term.
Google’s headquarters at King’s Cross is one high-profile project that is currently delayed. A ambitious redesign means work is unlikely to start on site until 2016 at the earliest.
The new owners of Canary Wharf have also underlined their commitment to push forward with the long-term £3 billion redevelopment for the Isle of Dogs.