A significant spike in demand for London office space has seen a rise in construction by developers, despite not having tenants signed up for the proposed space.
Deloitte have revealed that more than 30 projects were started in the six months leading up to March this year, 22 of which had not confirmed tenants prior to the starting of building work.
Only 37% of the 9.5m sq. ft of space currently under construction has been rented in advance, leaving 63% without tenants as of yet. The rapid growth in demand for London office space has contributed significantly to this, as the projected increase in the need for space suggests that a decline is not likely – leaving developers confident that space will be leased upon completion.
Deloitte, partner and head of real estate strategy, Anthony Duggan, said, “We expect further rises in rents and more pre-let deals on schemes under construction.
“We expect the development pipeline to continue to increase as developer confidence translates to more active construction sites across London.”
With developers such as Land Securities and British Land still benefiting from the 20 Fenchurch Street and Leadenhall Building’s respectively,profits in the developing market are expected to continue growing.
By: Kirsty MacGregor
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