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The London Office Crane Survey - Winter 2015

Construction activity boost

Our latest Crane Survey shows the total volume of space under construction across central London has risen once again, rivalling levels last seen in 2009. Available office space continues to be in short term supply and completions in 2015 have done little to alleviate this.

But who is building, who is leasing, and which areas of central London are seeing the highest volume of construction?

London office development: update

  • Office construction is up by 18% over the past six months, the second successive rise since 2013
  • 26 new starts have been recorded, adding 3 million sq ft to the pipeline
  • 21% rise in let space under construction
  • 2015 to deliver lowest level of completions in three years
  • 11.1 million sq ft of space under construction across central London over the past six months
  • 7 million sq ft of space under construction is available to let – a rise of 15% over the past six months.

Overview of construction activity

Who is building?

Institutions account for 39% of the current volume of office construction. REITs, which account for 19% of the space under construction, down from 21% six months ago.

Where is the construction?

  • The City and West End account for 73% of the total volume of construction: there are 13 new starts in The City totalling 2 million sq ft and four new starts in the West End down two-thirds from six months ago.
  • Midtown: six new starts equals the number started in our last Crane Survey.
  • Southbank: first new start in over 12 months.
  • Paddington: first new start since 2014.

Who’s leasing?

  • TMT occupiers continue to be the most active sector, accounting for 44% of the let space under construction.
  • The financial sector accounts for 27% of space leased.

Building up London: Key points

  • 2015 to deliver lowest levels of completions in three years: A move in completion dates has beset a number of schemes, pushing them into 2016; the picture is one of low supply for 2015.
  • The window for pre-letting remains open: Continued tightening of supply in the short-term and a rise in space let before completion will potentially lead to increased levels of pre-letting.

Future of construction in London

Developers continue to target 2018-19 for delivery; our forecast shows the amount of space predicted to be delivered is above average supply in 2018-19, but capacity constraints could impact the speed of delivery.

Dig into the data

Explore our findings

Take a look at our interactive selection of key statistics from the survey.

View our infographic

View the full infographic showing the key highlights of the London Office Crane Survey on SlideShare where you can also share or embed the infographic.

About the report

The Deloitte Real Estate London Office Crane Survey is the definitive survey of commercial construction in central London. This edition covers the six months to 30th September 2015.

The survey measures the volume and impact of office development (new build or significant office refurbishment of 10,000 sq ft) across central London over the next five years, and is widely used as a barometer of developers’ sentiment and future office supply.

 

Previous editions

 

View previous editions of the London Office Crane Survey to see how office development in London has changed over time:

2015

Summer 2015: Appetite for Construction

2014

Winter 2014: Building Momentum

Summer 2014: Gearing up for the next phase of construction

About the report

The Deloitte Real Estate London Office Crane Survey is the definitive survey of commercial construction in central London. This edition covers the six months to 31 March 2015.
 

The survey measures the volume and impact of office development (new build or significant office refurbishment of 10,000 sq ft) across central London over the next five years, and is widely used as a barometer of developers’ sentiment and future office supply.

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