Speculative projects boost commercial sector
Commercial construction in London has reached its highest level since 2008, according to the latest Glenigan & JLL UK Commercial Construction Index. Activity totalled £7.4 billion in the first quarter of 2016 — largely driven by speculative developments.
The level of speculative office development under construction in central London totalled 770 000 m2 at the end of the first quarter of 2016, well ahead of the long-term average of 460 000 m2, indicating that developers are continuing to respond to London’s burgeoning requirements for new office space.
In the West End office market alone construction started speculatively on nine schemes in that period. They totalled 55 461 m2, the highest level of commencements since the fourth quarter of 2014.
The largest starts were at Brunel, W2 at 22 000 m2, which is scheduled for completion in 2019, and The Foundry, W8, an 10 000 m2 refurbishment planned for completion by the end of 2016.
Generally, the construction industry remains cautious. However, a recent fall in costs has offered some rebound for the commercial sector. While total construction starts fell marginally this quarter, construction data on the whole remains volatile. Construction activity levels remain solid, with London showing notable signs of resilience.
