The volume of new office space under construction in central London has almost doubled in the past six months, according to Deloitte’s latest Crane Survey.
Some 22 new schemes comprising 2.1m sq ft of office space got underway in the period from 1 April to 30 September.
However while the number and volume of new starts is up, Deloitte also found a significant drop in the total amount of space currently under construction after 3.7m sq ft of new office space was completed during the period – the highest recorded for 10 years.
Of the 7.7m sq ft of office space now under construction, 41% is already let.
With 2015 expected to see the lowest volume of completions for 20 years, Deloitte said it expected a demand and supply imbalance to remain for at least three years, leading to an increase in preletting and prolonged rental growth.
The survey also found signs that developers were responding to this imbalance with an 18% surge in demolition activity, with 5m sq ft of space now being demolished.
Deloitte head of City leasing Steve Johns said the sharpest rise in construction starts was in the City of London, where 10 office buildings are now underway.
“This includes over a million sq ft in the City core and over 500,000 sq ft in Tech city, accounting for three-quarters of the volume of space across all the new schemes we’ve recorded,” he said.
“The West End has also seen 10 new starts, adding 462,000 sq ft to the development pipeline, while South Bank, Midtown and Docklands have seen no new construction this survey.”
