Construction of London office space has risen 24% in 6 months.
Research by Deloitte shows that the 6 months leading up to March 2015 saw the second biggest increase in office construction in 20 years.
There is currently 9.5m sq. ft under construction within London, almost half of which is located in the city. Property developers are responding to rising demand in commercial offices, in part due to the recent economic growth. As very little construction was undertaken in the 5 years after the recession, developers are now having to catch up with the lack of supply.
The technology and creative sectors make up almost half of all new lettings.
Deloitte, head of real estate strategy, Anthony Duggan, said, “We are now seeing the start of the supply response the market has been expecting, thanks to the robust economic conditions [and] strength of London as a global city.”
He suggested that the market would see “further rises in rents and more pre-let deals on schemes under construction as tenants compete for the limited amount of available space.”
Though the growth in construction is injecting a significant amount of much needed space into the city, the supply is unlikely to exceed the demand, making space as desirable as ever.
By: Kirsty MacGregor
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