Confidence to develop new London offices bounces back

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There has been an increased appetite for new starts and speculative developments on London office construction sites, despite the popularity of work-from-home, new research suggests.

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According to Deloitte’s London Office Crane Survey, new openings grew 10% from a previous study in May to 3.4 million square feet between April and September.

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This is well above the long-term average of 2.4 million square feet.

Total volume under construction declined to 13 million square feet in the six months to September, although it was still above the long-term average of 10.7 million square feet.

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The average plan size has increased by 28%, which “demonstrates a greater risk appetite on individual plans”, the report said.

The capital’s commitment to invest in projects comes despite the occupied market undergoing significant changes since the start of the pandemic.

After realizing how well some employees have adapted to working from home, some companies want to reduce the size of the office. In addition, many bosses expect fewer people at headquarters at a time, as they adopt a mix of home and office hours.

However, many developers have reported a high demand for new and eco-friendly buildings, as businesses offer employees attractive places to work in the city.

More than a third of respondents (37%) now expect home working to have no impact on leasing demand, which is three times the proportion (12%) compared to a year ago.

Mike Cracknell, Director of Real Estate at Deloitte, said: “The survey shows that growth in pre-lates of new construction started at 19% this time, up from 10%. In addition, there was a high level of speculative growth Is.”

He added: “This reflects the ability of developers to ‘see’ the short-term effects of the pandemic in a future where occupancy and demand will rebound, even as working patterns and office configurations change.”

Deloitte’s research looked at data for half a year to September and included a survey of the capital’s biggest developers.

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