Published on : May 19, 2015
The office buildings in London have jumped up sharply as developers swarm to take advantage of the growing demand from business rentals.
The amount of construction for office spaces in the central part of the city has risen 24% in the last six months, based on a survey carried on construction activity by Deloitte, an advisory firm. This is accounted as the second biggest jump in the last twenty years.
In totality, the total area under construction is estimated to be 9.5m sq ft with more than half of the construction going on in the city, wherein large numbers of skyscrapers are sprouting up.
Real estate developers are responding to growing corporate demand from companies on account of Britain’s economy returning to growth trajectory. Specifically, the rise in rentals came from creative sectors and technology, which accounted for half of the new lettings in the last six months.
In the last five years post the financial crisis, new spaces were not built in central London which means occupiers are challenged with supply shortage. Owing to strong rental demand, the space under construction in the city is lowest which is available for letting in central London.
Only half of the spaces available are unlet, compared to 59% in the Docklands and 84% in the West End, as per Deloitte. In the city,, the amount of office space available is at its lowest in more than ten years, as per figures from property advisory firm DTZ.
As a consequence, in the area rents have shot more than 14% in the last two years.