First rise in office construction for three years
Published:  06 May, 2011

LONDON: The first rise in construction in three years has been reported by commerical property consultants, Drivers Jonas Deloitte.


The Crane Survey of the capital recorded 25 new schemes. A total of 6.4 million sq ft is now under construction compared to an all time low of just 2.7 million sq ft six months ago.


Three new City towers will deliver over 160 floors in 2014.

London's West End has also hit a two-year construction high with 2 million sq ft and "a record number of new starts".

Anthony Duggan, head of research at Drivers Jonas Deloitte, said: "This survey records a dramatic positive change in construction activity. The race is on to deliver schemes to take advantage of the dwindling supply of Grade A space in 2012 and 2013.

"Large buildings in Londno's West End, such as British Land's Regents Place and Legal & General & Mitsubishi's Central St Giles have been star performers over the last year - developers have recognised this trend and are looking to cash in on this type of occupier demand," said Mr Duggan.

Matthew Elliott, head of transactions at Drivers Jonas Deloitte, commented: "The big story is the building of the new City towers. If all are built we could see over 200 tower floors coming to the market at a similar time in 2014-15 - an unprecedented situation.

"This excludes the Shard, which is being built on the other side of the Thames.

"Some will worry that this will lead to oversupply and falling rents, but others say that this is a further sign of confidence, a sign that London remains the global financial centre. Everyone is talking about it but the market doesn't yet know how this will play out."

According to Mr Duggan: "It is looking increasingly likely that 2012 will be the lowest year of completions on record with a window of opportunity still remaining to deliver into 2013 - but only if work starts immediately."

Outside the City and West End, midtown developers have been busy with six new starts - tripling construction activity in just six months with just over 600 000sq ft under construction.

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