The latest Deloitte crane survey has seen the highest number of new office completions for 18 years with construction starts jumping by a fifth.
The survey has found that new construction starts have risen by 20% in the six months leading up to March 2021, compared with the previous six months, despite the interruption of the pandemic with 3.1m square feet of space currently under construction in 32 different schemes. Between October 2020 and March 2021, completions reached 4.5 square feet between October 2020 and March 2021.
It has also been found that more than half (56%) of new contract work is expected to involve an extensive upgrade of existing office buildings.
Mike Cracknell,, Deloitte real estate director said “Many existing office buildings are capable of being turned into COVID-safe and high-quality workspaces, so it is unsurprising that developers are following the more sustainable path of refurbishments.”
“Grade A, well-connected and eco-friendly office spaces, designed to maximise the benefits of new ways of working, will be the most desirable”. He also stated that more than 50% of developers were planning to increase their pipelines in the next 6 months.
Now accounting for 40% of all pre-let space, new occupiers include the technology, media and telecoms firms sectors and financial services accounting for 16% of new pre-let space.
Richard Hammell, Deloitte UK head of financial services said “With the acceleration of shifting working patterns, the financial services sector is consolidating its office presence in central London, whilst in parallel considering how businesses and functions can be deployed outside the capital, supporting regional growth.”
The survey also considered new emerging working practices which are expected to reduce office demand by 10-15% in terms of space. However, there are growing requirements for more space and collaborative areas for those who do work in offices which is expected to offset the gap in demand for space.