London office starts set to surge over next 6 months

Aaron Morby 1 month ago
Share

London is set for a surge in office project starts over the next six months driven by pent up demand and improved building energy perfornce.

According to Deloitte’s latest London Office Crane survey report there is currently 2.7m sq ft of planned office buildings in demolition phase and scheduled to start before the end of September.

The projects will continue to follow the trend of a decline in new build and growth in sizeable refurbishments as pressure continues to re-use and recycle says the survey.

The most anticipated is the redevelopment of BT’s former headquarters, the 729,000 sq ft 81 Newgate Street near St Paul’s Cathedral.

A substantial retrofit will transform this imposing 1980s office block by spring 2025 with sustainability credentials a key influence on design.

Mike Cracknell, director in real estate at Deloitte, said: “Increased new starts – especially of refurbishments – reflects anticipated renewal of existing stock to provide sustainable and quality space now strongly demanded by occupiers.”

He added that the longer term outlook would remain strong as property owners and developers sought to upgrade building performance.

“A raft of delays, partly driven by supply chain disruption and labour shortages, contributed to a lag for developments to complete. Despite this, the market is displaying resilience with appetite amongst investors remaining strong. This coupled with occupier demand is contributing to confidence in the city.”

This sentiment is echoed by developers, with two-thirds saying they intend to increase their pipelines in the next six months.

At the same time, new Minimum Energy Efficiency legislation currently passing through parliament is anticipated to radically tighten standards, with minimum compliance levels moving from Grade E to Grade B by 2030.

The survey estimates that 80% of London office stock will need to be upgraded. This is equivalent to around 15 million sq ft per annum.

In the past six months 36 schemes started. Notably, 31 of these were comprehensive refurbishments.

This reflected cost-related challenges with new build and appreciation of the embodied carbon within existing structures increasing preference to refurbish, re-use and recycle are clear.

Trade package cost predictions


The survey also tracked trade subcontractors predictions for prices over the next 12 months, which are expected to rise even more sharply going forward.

Twelve months ago, trades were predicting an average rise over the following 12 months of around 3.4% for commercial office projects, and 3.0% for fit-out projects.

In the latest survey trades are predicting an increase of 10.8% for office projects and 7.6% for fit-out projects.

Latest news

Ten demolition firms named in cartel probe

Biggest names in demolition face massive fines over "unacceptable" behaviour on 19 contracts worth over £150m
3 days ago

Imtech vows to avoid big resi jobs after return to profit

Engineering services arm puts trio of loss-making residential jobs behind it
3 days ago

Sisk replaces Morgan Sindall on £1bn Midlands Highways Alliance

Four firms secure places in Midlands framework renewal race
3 days ago

Winvic wins Bristol Redcliff Quarter 468 flats job

Grainger buys planned build to rent project and brings in Winvic to start this Autumn
3 days ago

Peel takes on Wirral Waters after Urban Splash modular collapse

Developer is reviewing whether to return to traditional build methods after modular specialist collapse
3 days ago

Kier launches £80m JV to build 2,000 homes by 2027

Property arm JV with Lloyds fund to develop housing on urban brownfield sites
4 days ago

Mace chief Reynolds replaces Mitchell at CLC

Mark Reynold takes over as co-chair of the Construction Leadership Council
3 days ago

Cost inflation forces bid rethink for £200m M5 junction 10

ECI simplified and amendments made to reflect rising construction costs
4 days ago

Wages among key trades keep pace with cost of living rise

Self employed plasterers, plumbers, roofers and scaffolders enjoy wage rises ahead of annual inflation rate
4 days ago

Midgard drives recovery at JRL Group

Revenue tops £600m again at diversified contractor
4 days ago

Green light for £100m Norwich A47 dualling

Galliford Try to start work in October on 2.6km dualling between Norwich and Acle Straight
4 days ago

Design change sees 70,000 cubic metres of concrete cut on HS2 stretch

Revamp of Staffordshire cutting will mean 6,700 fewer concrete mixer lorry loads
4 days ago

Subcontractors and suppliers wanted across the Midlands

Constructionline Meet the Buyer event in Derby: Register now
4 days ago

Contract race starts as cost of giant aqueduct job hits £1.75bn

United Utilities looking to shortlist three bidders for Haweswater Aqueduct Resilience Programme
5 days ago

M&S blasts Gove after Oxford St rebuild plan called in

Retailer "bewildered" after Housing Secretary steps-in over embedded carbon concerns
5 days ago

Springfield buys rival Scottish house builder for £46m

Mactaggart & Mickel Group takeover deal includes 17 sites with planning for 700 homes
5 days ago

Costain bets on hydrogen infrastructure

Consortium launches to develop hydrogen infrastructure for shipping and aviation in the Westcountry
5 days ago

Caddick starts on Star Wars bar office scheme

Host of employee-friendly features on new building at Crewe Business Park
5 days ago

Murphy to host virtual recruitment day

Specialist engineering and civils contractor opens doors online to potential new staff: Register now
5 days ago

Plans in for Isle of Dogs 52-storey resi tower

460 flats skyscraper to replace offices at 4 & 5 Harbour Exchange Square
6 days ago

Van Elle seals piling deal on Transpennine Route Upgrade

Firm appointed to the piling framework for the West of Leeds section
6 days ago

Demolition firm fined £5,000 after fatal platform fall

Contractor went into administration following death plunge at Scottish Power site
6 days ago

Modular specialist TopHat to open vast housing factory

Goldman Sachs-backed house builder to open Europe's largest modular factory in Corby
6 days ago

Asphalt giants make low carbon standard for road mixes

Tarmac and Aggregate Industries make warm mix asphalt new standard on highways jobs
6 days ago

Wates launches Retrofit brand for net zero work

Wates Retrofit to target domestic and non domestic clients
6 days ago

BAM wins £24m Wigan net zero carbon school

BAM has started enabling works at Fred Longworth High School development
6 days ago

Urban Splash modular failure to cost supply chain £12m

Suppliers left with mountain of worthless invoices following Urban Splash House collapse
7 days ago

Kier to trial hydrogen generators on site

Zero-emission generator to start trial on South West site
6 days ago

Hinkley Point remobilises to over 8,000 workforce – video

Construction work on second reactor achieves 20%-30% efficiency savings
7 days ago

Kier and Wates win £500m deal to expand six prisons

New houseblocks to be built at HMPs Bullingdon, Channings Wood, Elmley, Highpoint, Hindley and Wayland
7 days ago

Contractor services