London Office Construction Hits 20-Year High - Deloitte

Office construction in London has hit a 20-year high, according to the latest London Office Crane Survey by Deloitte.

The report reveals a total of 51 schemes have started over the past six months.

Overall, the volume of office construction has increased by 28% to 14.2 million sq ft over the past six months, the highest figure since the first quarter of 2008.

While 38% of space currently under construction is due to be completed over the next 12 months, 42% of the space has already been let to a tenant.


Deloitte predicts rising delivery will continue until 2018, when the industry will eventually reach its peak.

However, the organisation stated five years of low construction activity is limiting occupier choice.

In its survey, Deloitte said: "The current low level of available space across central London submarkets is partly due to developers postponing schemes following the 2008/09 recession. Our research shows that roughly 15 million sq ft of office space was completed during 2011-15, only around two thirds of the volume delivered in the previous five years, and half the delivery seen from 2001-2005.

"The rise in pre-letting activity seen in 2013-15 is now starting to feed through into the new construction starts. Five schemes, totalling 1.5 million sq ft, were leased before construction started. This has been particularly noticeable in the legal sector, where the share of leasing on buildings under construction has risen from 5% to 9% over the past six months."

(LM)