London office space completions reach 10-year high

Construction of a total of some 3.7 million square feet of office space was completed during the six months between April and September 2014, according to the latest research on the subject by the professional service firm Deloitte.

Deloitte’s London Office Crane Survey for Winter 2014 puts the latest figures for completed construction of offices across the city at a 10-year high for a six-month period.

However, the overall scale of offices currently being created in London has apparently reached a three-year low, with only 7.7 million sq ft under construction. Although, there was almost twice as much new space added to the in-construction pipeline across London in the six months most recently assessed than was there in the same period of 2013.

Other interesting notes to emerge from Deloitte’s latest study include the projection that rental rates across the city will continue to rise despite millions more square feet being added to available supplies. Plus, around 41 per cent of the office space in construction across London is reportedly already let to intended occupiers.

Of the various districts and areas of central London, the City was found to be the most active as far as new office space constructions were concerned, with 10 new projects started there between April and September. Among those construction efforts, the development at 1 London Wall Place was the largest to be pre-let, with 309,000 sq ft set to be built at the City of London site.

In terms of Grade A office space and rents across the capital, Deloitte’s current expectations are that price per square foot will increase by around 5.5 per cent in the City and by 8.7 per cent in the West End districts during 2015.

“Office construction is down 17 per cent in the last six 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,” the Deloitte report read.

“However, 58 per cent of this space was already let, 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.”

Last month, London was rated as being the most desirable city anywhere in the world in which to work and pursue a career by a global survey of 200,000 professionals carried out on behalf of the Boston Consulting Group. London came in ahead of New York, Paris, Sydney and Madrid in the study, which rated the UK as the second most desirable country to work in behind the USA.