Deloitte Real Estate’s latest crane survey has revealed that the number of new offices being constructed in London has dropped by 50%.
Following the global pandemic which has caused delays to current projects, the London market is now facing a state of suspension. Only 240,000m² foot of new office space was being constructed in the six-month period to 30 September, 50 per cent lower than the previous period between October 2019 and March 2020.
By carrying out a poll of the largest developers and analysing data to draw conclusions, the specialist consultants found that total office space under construction in London stood at 1.4 million m² which is roughly the same as around six months ago due to the fact that the developments have been slow to finish since the Coronavirus pandemic struck.
Mike Cracknell, Real Estate Director at Deloitte said ¨Our data reveals that 307,000m² of office construction was not completed as scheduled between April and September and remains under construction. Had these projects completed on time, the total volume under construction would be almost a quarter lower. ¨
Deloitte have predicted that as a result of weaker demand, the economic downturn and difficult access to development finance, fewer new construction starts are likely in the short to medium term. The continued popularity of remote working amongst the UK workforce has also left developers and investors cautious of committing to new projects.
Despite the findings, Siobhan Godley, Deloitte Real Estate partner said although the figures on new construction starts are down significantly from their previous survey, that the numbers were broadly in line with the survey´s long term average.
She said ¨ Notably, a higher-than-average 40 per cent of new construction starts have already been pre-let, indicating less speculative construction. ¨