New office construction in central London has fallen by 50% in the past six months.
Deloitte Real Estate’s latest London Office Crane Survey shows demand in the Square Mile has fallen significantly, falling by 60%.
As the pandemic keeps people at home, developers are clarifying the situation, with many construction projects on hold until there is more clarity, a study found.
With more people working from home and the pandemic forcing employers to consider longer-term, flexible working options, Deloitte Real Estate director Mike Cracknell said the latest vaccine believes that the news could cause an increase in demand in the office sector.
“Our data reveals that 3.3m sq ft of office construction was not completed on schedule between April and September and is still under construction,” he said.
“Had these projects been completed on time, the total volume under construction would have been reduced by almost a quarter.”
“A clear majority (85%) of developers we surveyed identified weak tenant demand as a major barrier to launching new developments. Until there is clarity, developers will be hesitant to undertake new projects, especially speculative ones.
“Nevertheless, vaccine news has already led to a re-rating of property stocks, with the potential for a greater return to offices in the short term and increased investor demand for London offices in the medium term. It’s sexual.”
According to a survey conducted by Publicis Sapient, 47% of employees said they would be more comfortable returning to the office if there was an effective vaccine.
