London has seen a surge in building work in the past six months, despite the UK's slide back into recession as developers look to cash in on a shortage of office space, according to new research.
The go-ahead for major projects – including investment bank UBS's vast new headquarters at Broadgate and the Fitzroy Place redevelopment of the former Middlesex Hospital site in central London – means there is now 9.2 million sq ft of offices under construction in the capital, according to the latest Crane Survey from consultant Drivers Jonas Deloitte.
Although still low by historic standards, the upturn means commercial office work has trebled since the market low in 2008. Building activity has jumped 28 per cent in the past six months, the consultant said. In total 34 projects started on site at the end of the first quarter with Canary Wharf beginning work on its Churchill Place scheme in the Docklands.
Major developers such as Land Securities and British Land – both building skyscrapers in the City – are pinning hopes on a surge in demand for space as leases signed in the late 1980s and early 1990s expire in the years ahead.
Drivers Jonas Deloitte's head of research Anthony Duggan said: "While construction continues to rise in the core City and West End markets, our research shows that activity has returned to King's Cross and the Docklands, as well as the South Bank. This is a sign that developers feel that the low levels of construction compared to historic trends, and lower building costs, are compelling."