Commercial office construction increased by 28% in the first quarter of 2012 according to the latest London Office Crane Survey from Drivers Jonas Deloitte.
– 9.2m sq ft of office space under construction — up 28% since six months ago
– Construction volumes have trebled since 2008 market low
– 2013 set to be record year for the West End market. 2.7m sq ft of space is now under construction – half of this is expected to complete in 2013, and with more new starts expected imminently, the total volume for next year is likely to get close to the 25 year record of 1.9m sq ft delivered in 2005.
– Activity has returned to King’s Cross & Docklands (25 Churchill Place) for the first time in 18 months
Anthony Duggan, head of research, Drivers Jonas Deloitte, said:
“While construction continues to rise in the core City and West End markets, our research also shows that activity has returned to King’s Cross and the Docklands, as well as a further increase in activity along the Southbank. This is a sign that developers feel that the low levels of construction (compared to historic trends) and lower building costs are compelling. Positively, pre-letting is again a feature of the market, which should be a key focus for those with appropriate sites.
“Despite the upbeat signs from the development data, the reality is that, for some types of offices, tenant demand remains slow. We do believe that significant opportunities exist; but get the product and/or location wrong and the pitfalls could be just as large.”
The survey shows a number of new refurbishment schemes. The resultant new starts with relatively short build times programmes has boosted the completion data for 2013 by an extra 1.1m sq ft. Refurbishments now account for 22% of the construction activity.
2013 is set to deliver 2.9m sq ft of available office space, with an average of 2.3m sq ft expected to be delivered annually over the next three years.
Drivers Jonas Deloitte London Offices Crane Survey Summer 2012.
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