Deloitte Real Estate publishes the London Office Crane Survey has been added to Bookmarks.
Deloitte Real Estate publishes the London Office Crane Survey
Volume of new office space under construction doubles in six months
11 November 2014
Office development in London is beginning to flourish with 22 new schemes (2.1 million sq ft) starting construction in six months. This is almost double the volume of new space started compared to the previous six months, according to the London Office Crane Survey, published today by Deloitte Real Estate.
Steve Johns, head of City leasing at Deloitte Real Estate, said: “The sharpest rise in construction starts is in the City of London, where 10 new office buildings are now underway. This includes over a million sq ft in the City core and over 500,000 sq ft in ‘tech city’, accounting for three quarters of the volume of space across all the new schemes we’ve recorded. The West End has also seen 10 new starts, adding 462,000 sq ft to the development pipeline, while Southbank, Midtown and Docklands have seen no new construction this survey.”
The crane survey reveals that despite this rise in the number and volume of new schemes, the total amount of office space under construction in central London is down to 7.7 million sq ft. This is below the long-run average delivery of around 10 million sq ft, partly due to the 3.7 million sq ft of office space completing since the last survey.
Johns continues: “Office construction is down 17 per cent in the last 6 months, but we have seen 3.7 million sq ft of completions over the last six months, a 10 year high. To put that into context, a third of this space is within two City towers, with the remaining space across 22 central London buildings. However, 58 per cent of this space was leased before completion, demonstrating the strength of occupier demand. Similarly, of the total 7.7 million sq ft of space under construction, 41 per cent is already let. Despite a healthy pipeline of activity, 2015 is likely to deliver the lowest volumes of space in 20 years.
“With occupier demand expected to remain strong we foresee further increases in pre-letting activity, and demand for the best space to exceed new supply for the next three years. Nevertheless, with over five million sq ft now being demolished - a rise of 18 per cent in six months - developers are racing against the clock to deliver buildings while new supply remains relatively low.”
Notes to editors
About the London Office Crane Survey
Deloitte Real Estate’s London Office Crane Survey is the definitive review of commercial construction in central London, and is seen as a barometer of developer sentiment and future office supply. The report measures the volume and impact of office development (new build, or significant office refurbishments, of 10,000 sq ft or more) currently taking place across central London and analyses the pipeline of future development over the next five years.
The London Office Crane Survey is published every six months, with the last edition released in May 2014. The data in this report is correct as at 30th September 2014, and covers seven major central London office markets: The City (EC1 to EC4), Docklands, King’s Cross, Midtown, Paddington, Southbank, and the West End.
Deloitte Real Estate’s collection of central London development data commenced in 1982, and the first London Crane Survey was published in 1996.
Deloitte Real Estate’s commercial property research team is focused on producing thoughtful and insightful publications, as well as comprehensive bespoke reports for investors, developers and occupiers.
About Deloitte Real Estate
Deloitte Real Estate redefines the concept of a full-service real estate business, offering a breadth of capability and an innovative approach unequalled in the market.
Our team combines traditional property services with financial and business advisory expertise to deliver integrated solutions on the most simple assignment to the most complex. We apply a depth of insight drawn from our understanding of all industries and sectors to advise occupiers, lenders, investors and the public sector on every aspect of real estate in an increasingly complex world.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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