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The London Office Crane Survey

Navigating through uncertainty

Despite ongoing uncertainties surrounding Brexit, the last couple of years demonstrated that demand for office space in London has been strong. However, transaction volumes in Q1 2019, when the UK was expected to be leaving the EU, were unsurprisingly subdued, with businesses delaying leasing and investment decisions.

Since the date to leave the EU has now been delayed, will the slowdown in demand continue, and will this also start to impact office construction levels?

Key findings

  • Office construction volumes are up by 12% on our previous survey driven by more new starts
  • 37 new schemes broke ground, adding 3.5m sq ft into the development pipeline
  • New-build starts represented 64% of all new starts in 16 schemes
  • 55% of space under construction is already let
  • Financial Services are pre-letting more space. Technology, media and telecoms (TMT) also further increased its share, from 29% to 35%
  • Completions fall by 50%, to 2.1m sq ft
  • 2019 office completions are set to match 2018 total


Download the London Office Crane Survey summer 2019 report

Download the London Office Crane Survey summer 2019 infographic

Explore our data

Central London


22
Number of new
construction starts
200,000
sq ft
Total amount under
construction
Amount of space under
construction let

Key business sectors
leasing space

Office development pipeline

90
Number of schemes
under construction
10.3
Demolition level
million sq ft
% new build vs
% refurbishment

Central London office space under construction and number of new starts

Occupier leasing activity on space under construction

TMT
35%
Financial
29%
Corporate
8%
Serviced Office
8%
Other
6%
Professional
6%
Legal
5%
Insurance
3%
Show all statuses
Under construction
Under construction - New start
Completed
City
Docklands
King's Cross
Midtown
Paddington
Southbank
Stratford
West End
White City
Vauxhall-Nine      Elms-Battersea

Scheme name:

Developer/owner:

Total sq ft:

Construction activity is up, driven by more new starts

Following a dip in construction activity in our previous survey, total office space under construction between October 2018 and March 2019 amounted to 13.2 million sq ft, 12% up compared to the previous survey and above the long-term half-yearly average of 10.5 million sq ft.

Encouragingly, the volume of new starts is also the highest since our Q1 2016 survey, during the lead-up to the EU referendum. With 3.5 million sq ft of new office construction activity across 37 new schemes, the volume is 38% higher than in the previous survey.

The up-tick in construction activity in the run-up to the originally scheduled EU departure date of March 2019 is remarkable, given the magnitude of political and economic uncertainty. It demonstrates that developers have not delayed their construction plans and have confidence in the London leasing market over the long term.


Financial services pre-lets increase

Pre-letting is reaching new heights in London. Of all the space currently under construction, 55% has already been committed to, which represents a gradual uplift over the past few years. We found in this survey that leasing prior to completion was especially prominent for size ranges above 100,000 sq ft, where 78% has already been committed to.

Following subdued pre-letting activity from Financial Services occupiers in our previous two surveys, the latest figures show a rise in leased space under construction by 50% to 2.1m sq ft. Financial Services increased its share from 24% to 29% survey on survey, suggesting that the sector remains committed to London. TMT has also further increased its proportion of acquired space under construction, from 29% to 35%.


Long term pipeline is diminishing

Even though there was an up-tick in office construction levels, the overall pipeline under construction and proposed schemes declined by 23% over the past two years. What does it mean to the London office market? And is the tide about to turn for second-hand office space?

Discover our infographics

About the London Office Crane Survey report

Established more than 20 years ago, the London Office Crane Survey monitors the supply of new office developments in the main central London markets and emerging submarkets. The report:

  • Is the most authoritative guide to current and future construction levels
  • Provides findings that are of importance to investors, developers and occupiers alike
  • Is regarded as a key indicator of London’s economic health.
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