A survey has revealed that construction in central London is at a 20-year low, with just 250,000m² under development.
According to the latest Crane Survey research by property agency Drivers Jonas Deloitte, overall development is down by almost 70% on this time last year, while the report also indicates that 2010 and 2011 will see the lowest level of new commercial completions on record as the hangover from the recession continues.
On the up side, the report also predicted a flurry of new developments will start next year as the construction slow-down leads to a rise in rents as demand for rented accommodation continues to increase.
The report reveals the City of London has seen no new construction starts in the last 12 months – a first such occurrence since the firm published its first Crane Survey more than 20 years ago.
However, it predicts that London office rents will have risen by a more than a quarter by the end of the year as the completion of new builds dry up, with developers now hurriedly dusting off plans and purchasing sites ready to start construction next year.
The agency warns there is a distinct possibility of the market seeing an oversupply of space in 2014 as new developments are completed and the market swings to the other extreme.