London is seeing a major slowdown in new offices being built as developers grapple with Brexit uncertainty, a new survey has found
Office construction across central London fell by 9 per cent to 12.6m sq ft in the six months to 30 September - the lowest volume of new space started since 2014, the latest Deloitte Crane Survey revealed.
The latest figures show that 25 new office schemes started construction in the period. However, this represented the lowest volume of commercial space getting under way in more than three years and 21 per cent below the crane survey average, Deloitte said.
’Developers in central London continue to take stock of the current market dynamics, recognising a number of disrupting factors such as costs, Brexit uncertainty and the pace of workplace change,’ said Deloitte Real Estate head of insight Shaun Dawson.
‘We’re seeing a continued shift in timings for proposed schemes.’
The Deloitte survey covers the City, West End, Docklands, King’s Cross, Midtown, Paddington, Southbank, Vauxhall-Nine-Elms-Battersea, Stratford and White City.
Development activity slid 11 per cent in the City of London, with 7.3m sq ft of office space currently under construction.
However, 3.4m sq ft of space has completed in the City already this year, which is the highest volume since 2000. The West End was a bright spot, with 14 new schemes commencing during the period – the largest number recorded for a single area by Deloitte.
A total of 1.4m sq ft of office is currently being built across the West End. Across central London, demolition levels were static at around 8m sq ft.
’Developers are showing some caution on where and when to deliver schemes to market,’ Dawson added.
The survey found that 44 per cent of space under construction has been let.