London reaches 20-year low for development

CENTRAL London’s construction level is at a 20-year low, with just 2.7m square feet under development.

Overall development is down by almost 70 per cent on this time last year, according to the latest Crane Survey research by property agency Drivers Jonas Deloitte.

The report says this year and next will see the lowest level of new commercial completions on record as the hangover from recession continues.

But it predicted a flurry of new development to start next year as the construction slow-down leads to a rise in rents.

The report points out the City of London has seen no new construction starts in the last twelve months – the first time this has happened since the firm published its first Crane Survey more than 20 years ago.

However, it predicts that office rents in London will have risen by a more than a quarter over 2010 as new delivery dries up, with developers now hurriedly dusting off plans and purchasing sites ready to start construction next year.

The agency warns there is a real possibility of the market seeing an oversupply of space in 2014 as new developments are completed and the market swings to the other extreme.