Largest volume of office space delivered in London since 2004

London saw 3.9m sq ft of new office space complete in the last six months – the largest volume of office space delivered in central London for 13 years. The London Office Crane Survey, published today by Deloitte Real Estate, recorded 28 new construction starts over the six months, compared with 40 in the previous survey. This adds 3.2m sq ft to the development pipeline – a rise of 13%. Despite this, the 13.9m sq ft of office space currently under construction across the capital is down 6% on the previous survey’s 14.8m sq ft. Nigel Shilton, managing partner at Deloitte Real Estate, said: “The decrease in overall volume of space under construction could suggest that developers have slowed down, yet this is more a result of timing and two years of elevated levels of construction completing rather than developers holding off. “Demolition levels remain high at 7.9m sq ft, which chimes with the sentiment of our surveyed contractors who expect a rise in workload over the coming 12 months.” He added: “Looking at the development pipeline, we forecast around 39m sq ft to be delivered by 2021. Very few schemes have been cancelled, highlighting continuing developer confidence.” Is there a glut of supply on the horizon? Deloitte Real Estate’s research suggests not. The survey found occupier demand remains resilient, with 43% (6m sq ft) of space currently under construction already let. Deloitte Real Estate’s Shaun Dawson, author of the survey, said: “Good quality new stock is attracting significant tenant demand with 10 of the new schemes starting construction already achieving leasing success, and of the 3.9m sq ft of completed space, half was pre-let. “This early leasing activity has softened the impact the volume of space completing has on the market.” To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette