More office construction started in London in the summer of 2023 than in any comparable period in the last 18 years, surprising figures have revealed.
The latest Office Crane Survey by consultancy Deloitte found that 474,000 sq m of commercial projects started on site in the six months to the end of September.
This was a 16 percent jump from the previous winter and was more than double the volume that started in the summer of 2022.
It also surpassed the previous record high of 464,000 square meters set in the first quarter of 2020, before the full impact of the Covid-19 pandemic on work patterns became apparent.
The subsequent shift to working from home and the rising cost of construction due to inflation and high interest rates reduced interest in new office buildings in 2021-22.
However, the latest figures show a total of 93 commercial projects started in the capital in the year to September, down slightly on the 94 started in the previous 18 months.
The increase in new buildings is not slowing the demand for improvements to existing offices.
The number of rehabilitation starts broke records for the second consecutive survey, with 34 schemes registered in the latest period, with a total of 307,000 square meters of coverage. Deloitte said this was driven by an anticipated tightening of energy efficiency standards, as well as tenants’ own sustainability aspirations.
Sophie Allan, head of real asset advisory at the consultancy, said: “New builds have roared back from their post-pandemic nadir, likely driven by large pre-leases and growing developer confidence in demand for premium office space.
“Meanwhile, refurbishments continue to play a critical role in London’s development portfolio as the growing need to modernize office space to prevent obsolescence grows.
“The future will see more skyscrapers added to the city’s skyline, with three major developments recently gaining planning permission.”
