London’s £12bn office pipeline at risk
More than 150 office projects in London collectively worth £12 billion are at risk of being mothballed or stalling due to a lack of funding and pre-lets, according to a new report
The London Office Development report by consultant EC Harris said the capital’s ‘unprecedented’ pipeline totalling 5 million m² of gross internal office space by 2016 was in a ‘precarious position’ which could see many failing to reach construction.
EC Harris head of commercial development Richard Taylor said: ‘On paper, the development pipeline for London offices shows massive potential and investment.
‘However, in reality the market is very different, with a large number of these projects unlikely to be delivered as they struggle to find pre-lets and external funding.
‘To stand a chance for success, projects need to differentiate and create a significant market advantage if they are to maximise their chances of completion.’
More than 50 per cent of the schemes are located in the City of London – and 60 per cent of the total area – including key projects such as the Rafael Viñoly’s Walkie Talkie and Rogers Stirk Harbour + Partners’ Cheesegrater.
Midtown accounts for 30 potential developments totalling 7 million sq ft and the West End 25, the report said.
Long expected drivers such as the boom in lease expires due before 2017 and the perceived low level of refurbishment space could be undermined by the euro crisis and its impact on funding markets and tenant confidence, the report warned.