A £12bn pipeline of new office projects in London is at risk over the next five years as nervous would-be tenants refuse to move and hit demand for new space, the building consultantEC Harris warned yesterday.
There are currently 150 projects with the potential to deliver more than 53 million sq ft of new space by 2016 – but not all will be built as tenants become much more cautious about committing to new space or decide to move to existing buildings, the firm said.
The huge pipeline has been fuelled by up to 70 million sq ft in office leases which are due to expire before 2017. But the majority of the buildings planned to meet the demand will not be delivered before 2016, and in some cases won't make it to site at all, the consultant warned.
Developers face a "significant challenge" as banks steer clear of property lending while the eurozone crisis has also sapped tenant optimism, according to the report.
Richard Taylor, head of commercial development at EC Harris. said: "There is little in way of speculative development moving forward at the present time and we don't see this changing for up to two years due to a lack of confidence in the market."