Office Space in the Square Mile Hits Record Low
It has today been reported that office space in London’s Square Mile has hit a record low, and will most likely stay that way until the city’s two landmark skyscrapers are completed in 2014.
The Leadenhall Building, also known as ‘The Cheesegrater’, and 20 Fenchurch Street, nicknamed ‘The Walkie Talkie’, will be some of the only providers of new office space within the Square Mile. The only other plans include 443,000sqft of space, which is the lowest amount in 27 years.
The reasons behind this lack of new office space is thought to be attributed to the collapse of Lehman Brothers’ and the credit crunch that followed, meaning that funding for new developments had to be switched off almost instantly.
The lack of funding means that new office space schemes will be put on hold. Attention will be turned to refurbishment rather than new buildings, with the Cheesegrater and the Walkie Talkie being the last skyscrapers planned in the Square Mile.
Matthew Elliot, head of the City office at Drivers Jonas Deloitte told the times, “Until the two towers arrive in mid-2014, we will have the lowest supply of new space the City has ever seen. This normally leads to rising rents, but only if there are tenants to take it and there’s a lot of caution at the moment”.
Reports suggest that although the office market in the Square Mile is struggling, the West End market is far more resilient, with 2.3million square foot of office space under construction, which is up by 12% in the last six months.
Anthony Duggan, head of research at the commercial property consultancy added that, “given the weakening economic environment ... The answer, as always, will depend on location and size of the schemes being delivered. The comfort for developers will be [that] the total volume of delivery still remains some way behind long-term levels”.
As long as demand for office space remains high, the Square Mile may be able to recover completely, however, with competition from the West End, and up and coming hot spots, such as Kings Cross, it may be an uphill struggle for some time.
To find out more about office space in the Square Mile, talk to Search Office Space now on 0800740 80 80 to discuss your requirements.