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London office construction at 20 year high despite Brexit jitters

The rate of new build office construction in London has hit a 20 year high according figures released by Deloitte Real Estate.

According to the consultancies six-monthly Crane Survey report, there were 51 new office schemes that began construction in the last six months, the highest figures since the firm started producing the report two decades ago.

This is despite fears that the impending Brexit vote may spook developers, who some were predicting would hold back on new schemes until after June’s EU referendum.

In fact, Deloitte’s figures show that the pace of development has actually quickened, with a steady rise in demolitions and predictions of a continued rise in construction until 2018.

Deloitte’s Chris Lewis, who is Head of Occupier Advisory, commented: “Currently, there is little sign that the referendum is influencing future construction. Demolition activity, a reasonably reliable indicator of future new starts, has risen by more than 10% over the past six months – even as a record number of schemes have moved from demolition to construction.

He added: “New construction starts on speculative schemes are likely to slow if the UK’s EU referendum produces a vote to leave. Aside from any longer-term implications of a leave vote, there would be the initial uncertainty over the strength of occupier demand that tends to arise from significant economic and political events. In the past, this has been followed by a slowdown in central London office construction.”

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