Confidence returns to London office market
According to the latest London Office Crane Survey by Deloitte, the capital’s commercial office market is experiencing a significant upturn in confidence as the volume of new starts has increased by 10% from the previous survey in May.
Deloitte’s findings show that the volume of new starts has increased from around 280,000m2 to 315,000m2, above the long-term average. However, the number of new starts has fallen, which means the average scheme size has increased by 28%, which Deloitte says is a sign of a greater appetite for risk among developers.
As in previous surveys, the bulk of new commercial project starts in the capital were concentrated in three main areas: the West End, Midtown and the City.
In the West End, the volume of new starts rose for the third consecutive survey by about one-quarter from 83,600m2 to 102,000m2.
Of the 12 new starts, three-quarters were refurbishment, the largest at 123 Buckingham Palace Road in Victoria, which highlights the growing trend towards reusing existing buildings.
Midtown recorded its lowest volume of new developments since 2019. There were only three new developments, providing 9,200m2 of office space. Of the three schemes, two are refurbishments.
In the City, there was a modest increase in the volume of new starts, which repeats a pattern from the previous two surveys. There were ten new schemes, with an equal split between refurbishments and new builds.