London Cranes Give A Lift

The building blocks of our future

Looking out of the train window, I can’t help but notice that the London skyline is undergoing more radical change. In particular, the area surrounding the financial heart of the city of London is playing host to an ever increasing forest of cranes. This is in fact very good news; cranes are a great barometer as to the faith in the future stability and economy of an area.

Deloitte Real Estate publishes the ‘London Office Crane Survey’ which focuses on the construction activity in London and the occupancy levels of existing and proposed buildings. It states that 9.7million sq. ft. of office space is currently under construction – a four year high – and the letting activity on these buildings is much more encouraging than in previous years.

Commercial development has increased by eight per cent in the last six months and the construction activity in London has trebled since a low in 2010. This low favoured landlords as available space dwindled and competition between potential occupiers became much fiercer.

Reason to be confident

Deloitte Real Estate recorded that ‘in Q1 2013, 33 per cent of space under construction was pre-let, all of which highlights the strength of the capital’s economy’. This increase in activity reflects the rise in confidence and optimism of the UK’s largest businesses, which will in turn kick-start another period of further development.

The survey also highlights that ‘appropriately specified office space is being built in the right locations’. Mayfair is set to see 400,000 sq. ft. developed this year which represents the largest available space the area has seen for several years, but, according to the survey, ‘the primary focus for future development is the areas of the West End outside Mayfair. The areas North of Oxford Street and Victoria are emerging as attractive locations with developer confidence driving construction activity and occupier demand driving rental rises of 74 per cent and 51 per cent respectively (since 2009)’.

So it appears that much the way a swallow announces the arrival of summer, and a swan the arrival of a severe winter, a crane really does announce the arrival of business confidence.

#cranes #londonoffices #ukoffices