Crane survey shows London office construction at 8 year high

Key findings from the latest Deloitte Crane Survey shows that the office build boom continues but the balance in London is moving from new build to refurbishment projects.

Deloitte London Office Crane Survey

The headlines

• 14.8 million sq ft of office space is under development, 4% up from the same survey six months ago and 41% higher than the 10-year average.
• Construction periods on some schemes have been extended, with completion dates slipping by an average of one quarter and almost a million sq ft of space, due to be completed by the end of Q3 2016, still under construction.
• 40 new office developments have started in the past 6 months, adding 2.8 million sq ft to the pipeline.
• New activity is down 42% from the record high in the summer survey.
• 41% of the space currently under construction has already been let

Office refurbishment boom

New starts on London office refurbishments (28 new start projects – 70% by volume of new space) are boosting the delivery of new office space for 2017.

However, refurbishments tend to be smaller projects than new builds which is why there has been a 26% fall in the average size of schemes over the past six months.

Will Matthews, head of Insight at Deloitte Real Estate, said that the expected increase in completions, combined with macroeconomic uncertainty is leading some developers to defer the start-date of future speculative schemes.

Deloitte forecasts rise in delivery during 2017 and 2018 and a peak in 2019-20

Demolition levels have increased by 12% over the six months, indicating that developers are pressing ahead despite the uncertainties.

Future trends

The survey also found that Internet of Things and new technology is set to revolutionise the workplace with the creation of Intelligent Buildings.

Survey snapshots

Below are more details from the Deloitte Survey – plus a link to the  Infographic.