City office new builds at record low

OFFICE development in the City has fallen to an all time low as developers lack the confidence to start new projects from scratch.

No new developments have started in the City in the past six months, the first time this has happened since records began, according to the Drivers Jonas Deloitte Crane Survey.

Developers remain spooked by the deficit, the UK’s fragile political situation and the Eurozone crisis, the survey added.

The number of office schemes under construction in Central London currently stands at 33, compared to 49 just six month ago.

The shortage of prime office space means rents will continue to rise sharply in the near future.

Matthew Elliott, partner and head of transactions for Drivers Jonas Deloitte, said: “We have already seen 15 per cent rental growth in the City and this will continue but only for the best new buildings.”

The lack of new development will benefit schemes that have just come on the market or are about to in the next six months. These include Gerald Ronson’s Heron Tower and Canon Place by Hines.