London new office demand slumps
The number of cranes adorning the London skyline has fallen by a fifth in just six months as the financial downturn chokes off corporate demand for new office space.
Developments have fallen by more than half in a year, from 46 this time last year to just 17 in the past six months. But a report today warns that London is still facing a massive oversupply of empty office space in the next few years.
Despite the slowdown in new starts this year, more than 12m sq ft of office space is still under construction, according to the Crane Survey from property consultancy Drivers Jonas out next week, equivalent to about 24 new blocks the size the Swiss Re tower in the City of London.
There is already about 15m sq ft of office space lying empty in central London, and vacancy rates in parts of the capital such as the City are set to rocket as banks and other financial institutions look to reduce staff and freeze relocation plans.
In the Square Mile alone there is 5.6m sq ft of space under construction without a waiting tenant, and the majority of this will be completed in 2009. The larger speculative schemes include Minerva’s Walbrook development, the Heron tower in Bishopsgate and British Land’s Ropemaker Place.