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London office building rate soars after pandemic lull

November 22, 2023
in Business
London office building rate soars after pandemic lull
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More London office builds began in the summer of 2023 than at any comparable period in the past 18 years, surprise figures have revealed.

The latest Office Crane Survey from consultancy Deloitte found that 474,000 square metres of commercial projects started on site in the six months to the end of September.

This marked a 16 per cent jump from the previous winter and was more than double the volume getting underway in the summer of 2022.

It also beat the previous record high of 464,000 square metres recorded in the first quarter of 2020, before the full impact of the Covid-19 pandemic on working patterns had become clear.

The subsequent shift towards working from home and the heightened cost of construction due to inflation and high interest rates dampened interest in new office buildings in 2021-22.

However, the latest figures show a total of 93 commercial projects kicked off in the capital in the year to September, marginally below the 94 that started in the prior 18 months.

The surge of new buildings is not dampening demand for improvement works to existing offices.

The number of refurbishment starts broke records for the second consecutive survey, with 34 schemes recorded in the latest period, totalling 307,000 square metres in coverage. Deloitte said this was driven by an anticipated tightening of energy-efficiency rules, as well as tenants’ own sustainability aspirations.

Sophie Allan, a director in real assets advisory at the consultancy, said: “New builds have roared back from their post-pandemic nadir, which has likely been driven by large pre-lets and growing developer confidence in the demand for premium office space.

“Meanwhile, refurbishments continue to play a critical role in London’s development pipeline, as the increasing need to modernise office space to avoid obsolescence grows.

“The future will see further skyscrapers added to the city’s skyline, with three large developments recently obtaining planning permission.”

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Copyright for syndicated content belongs to the linked Source : ConstructionNews – https://www.constructionnews.co.uk/sections/news/london-office-building-rate-soars-after-pandemic-lull-21-11-2023/

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