Take a look at the figures
The development of new offices in central London has declined, according to the latest London Office Crane Survey by Deloitte Real Estate. Construction activity now totals 12.6 million sq ft, a 9 per cent drop since the previous survey (six months ago).
Shaun Dawson, head of insight at Deloitte Real Estate, said: “We have seen slowdown in development activity with the last two crane surveys recording a fall, but total volumes still remain high compared to our long-term average, continuing to stay above 10 million sq ft since 2015.”
The survey reports 25 new office schemes starting construction, adding 1.8 million sq ft into the development pipeline. This is the lowest amount of new space started in over three years and 21 per cent below the crane survey average. Dawson added: “It is this reduced volume of new space starting that could indicate a slowdown and suggests a cautionary approach by developers over the past year.”
In the City development activity is down 11 per cent with 7.3 million sq ft of office space currently under construction. Only eight new schemes started in this period, representing 804,000 sq ft. This is significantly lower than the 1.1 million sq ft average. However, this reduction follows 3.4 million sq ft completing in 2017 so far, the highest volume to complete in the City since 2000.
The West End however has witnessed a noteworthy up-tick in activity. 14 new schemes totalling 657,500 sq ft have started construction, the greatest number of new starts recorded in a single crane survey for this submarket. Alongside existing activity, there is now 1.4 million sq ft being built across the West End – a 20 per cent increase since the last survey.
Refurbishment schemes once again dominate the new starts with 16 offices accounting for 70 per cent of the volume. However, refurbishments are generally smaller scale than new-builds so the average size of schemes starting this survey has fallen to 73,000 sq ft, lower than the long-term average of 97,000 sq ft.