November 27th 2023
Offices to become more eco-friendly to help boost London’s development sector
To meet growing customer demands and environmental regulations, a new survey from Deloitte has found investors are committing to a record volume of new London office construction projects.
The survey from Deloitte, of which the results were published last week, found that at the end of September, there were 124 schemes under construction totalling more than 15m square feet in volume in the West End, Midtown, Southbank, Docklands, Kings Cross and Paddington.
This represents a 9% increase in total construction volume form six months earlier. Around 37% of the space already under construction has also already been leased.
Demand for office space has become increasingly concentrated on the best, greenest space over the last few years, as companies push to meet their own environmental targets and lure workers back after the pandemic-era shift to flexible working.
Against this backdrop, construction volumes took a hit during the Covid-19 pandemic, as developers were forced to put projects on hold, ultimately reducing the supply of new space. This has encouraged more companies to commit to buildings even before they’ve started work to ensure they secure the best space.
In addition the research said developers anticipate that they will achieve operational net zero across their portfolios by 2040. However, firms pointed to the cost of construction as the biggest challenge in achieving that.
Sophie Allan, Deloitte real assets advisory director, said: ‘New builds have roared back from their post-pandemic nadir, which has likely been driven by large pre-lets and growing developer confidence in the demand for premium office space.
‘Refurbishments continue to play a critical role in London’s development pipeline as the increasing need to modernise office space to avoid obsolescence grows.’
Image: Kelvin Zyteng
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