Figures in CBRE's latest quarterly Central London Property Market Review (32-page / 6.63MB PDF) show that there is currently 11 million square feet of office space under construction in central London, of which 5.4m sq ft is in the City and 2m sq ft in the West End. The figure is a 13% rise from the previous quarter and the highest number since 2008, the report said.
Around 60% of the space under construction is speculative. CBRE said that this was an increase of 139% since the first quarter of 2010, indicating improved developer confidence. "We expect the volume of space under construction to continue rising as the recovery in the occupier market strengthens and demand for new space increases," it said.
The report also noted that employment within office-based industries in central London has grown by 4.4% in the year to March 2013, the largest annual increase since 2005. It said that office based employment was forecast to grow by around 2% per year between 2013 and 2017.
"Our expectation for the second half of 2013 is for more of the same, with the positive employment data and improving business confidence filtering through to the occupier market," said CBRE central London managing director Adam Hetherington in the report. "This will help support office take-up levels and lead to renewed, if unspectacular, rental growth".
