Data from commercial property firm Drivers Jonas Deloitte has shown that the amount of office space completed in Central London is at a 25 year low – with just 2m sq. ft. of space set to have been completed during 2012.
Interestingly the firm also reports that nearly a quarter of this space will be refurbished office space, rather than brand new developments.
This dip in construction is attributed to the downturn that occurred during 2009, when many office developments were mothballed or placed on hold as the economic crisis began to take hold.
As investment has now begun to recover however, it is expected that the developments now being reactivated could lead to a leap in construction levels during 2013 and 2014.
Commenting on the impact of this available space and future development, Jonas Deloitte Head of Research Anthony Duggan said:
“Positively for developers of London office space we expect the demand that will transact to continue to focus on new, efficient, appropriately specified, attractively designed and correctly priced real estate.
“We believe the volume of space under construction is ‘manageable’, i.e. not too high given the weak market conditions. However delivering the right product remains key and the market is likely to be unforgiving for substandard schemes.”