Rising London development masks slowdown in delivery

Commercial property development in Central London has risen by 12 percent since the summer, Drivers Jonas Deloitte’s Winter 2011 Crane Survey has revealed. Approximately 7.2 million sq ft of commercial space is currently under construction – just under a million more than during the summer and 4.5 million than the winter of 2011.

In spite of the positive figures, only around 443,000 sq ft of new space is due to be delivered during 2012, representing the lowest levels of new development in a decade.

“The next 24 months no longer looks as devoid of delivery as it has over the last few surveys, however, delivery of new space remains low compared to historic levels,” said Anthony Duggan, partner and head of research at Drivers Jonas Deloitte.

“The question now is whether the market needs this new space given the weakening economic environment.  The answer, as always, will depend on location and size of the schemes being delivered.”

Of new developments, 64 percent are renovations and refurbishments over new builds. This indicates that developers are keen to get space to market to fill the deficit of Grade A space developing in the City and the West End.