Office Space Development Activity Increased in Central London in 2011
This year has seen an increase in office space development activity. The 4% increase was highlighted in a report by real estate company BNP Paribas.
A new report has shown that the office space development pipeline for property in Central London has increased since the beginning of the year.
The BNP Paribas Real Estate RADAR London report states that there has been an increase of about 4% to 19.7 sq ft with a rise in the amount of office space under construction and with planning permission. However, the amount of space at planning application stage has decreased due to consent being granted to several large schemes.
The figures come after the City has experienced a quiet period of low speculative development with completions being at their lowest level since 2006.
The level of development starts since 2008/9 has had an effect on the completions with just under 1m sq. ft. of office space being delivered this year.
It is expected that the low rate of completions will continue well into 2012 and 2013, with the level of grade A property being at a record low. However, beyond 2013 supply will recover sharply with major tower schemes providing office space in the City. Recent reports show that the Leadenhall building and 20 Fenchurch Street will be big contenders in this.
Since the end of 2010, the total office space development activity has seen a 16% increase. Although planning permission remains somewhat unchanged during the same period, there has been an increase in the amount of space under construction, bringing it back in line with general levels of activity.
Developers have been encouraged to bring more projects forward due to the lack of grade A office space available, however the rate of office space development remains restricted in Mayfair, whilst Victoria has seen more activity in the market.