London office starts surged by 18% in the six months to September, taking the annual total to a 13-year high.
Work has started on 7.5m sq ft of office space since October 2014, according to Deloitte Real Estate’s London Office Crane Survey, the most since 2002.
The latest survey – which captures the six months from the start of April – registered 26 new office starts, following the 31 new schemes recorded in the previous six-month period.
The rise comes as a dearth of space was delivered this year. Just 2.5m sq ft has been completed, the lowest since 2012.
This has encouraged occupiers to commit to prelets, with 4.3m sq ft of the total 11.1m sq ft under construction already let, up by 22% from the March survey.
The low availability has also encouraged developers to commit to further new starts, according to Deloitte head of City leasing Steve Johns.
Demolition increased by 25% in the period and Deloitte is forecasting that completions in each of the next four years will be significantly above the long-run average grade-A office take-up of 4.9m sq ft.
It forecasts that 7m sq ft will complete in 2017 and 8.6m sq ft in 2018 – which will set a new record as the highest since 1992. A further 7.1m sq ft is forecast to be delivered in 2019.
