London office completions reach long-term high
The largest volume of new office space completed in central London for a 6-month period in the last 13 years was achieved in the period to May — at 362 000 m2. Shaun Dawson, author of the London office crane survey at Deloitte Real Estate, said, ‘The sheer volume of completed space is no surprise given the surge in development activity 18 months ago. In total 408 000 m2 was completed in 2016, and this momentum has continued into 2017. We expect this year’s annual total delivery to be the highest since 2003.’
The survey recorded 28 new construction starts over six months, compared to 40 in the previous survey — adding 297 000 m2 into the development pipeline, a rise of 13%.
Total office space under construction in London is 1.29 million m2, a 6% decrease from the 1.37 million m2 of the previous survey.
Trending this survey are new-builds compared to refurbishment projects. New-builds now account for the largest share the new space starting construction — 240 000 m2, pushing the average size up from 6500 m2 to 10 500 m2.
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.
‘Demolition levels remain high at 730 000 m2, which chimes with the sentiment of our surveyed contractors who expect a rise in workload over the coming 12 months.
‘Looking at the development pipeline, we forecast around 3.6 million m2 to be delivered by 2021. Very few schemes have been cancelled, highlighting continuing developer confidence.’