London market growth

The market hit a low point in construction in Q3 2004, but now the development cycle is restarting in the City and West End, where work is about to start on a number of schemes.

Drivers Jonas recorded a 6% rise in construction in the capital during the past two quarters. This was the first increase in activity for three years and follows a report by CB Richard Ellis, highlighted by QS News, that found office construction rose for the first time in five years in the first quarter of 2005.

The Drivers Jonas survey says pre-letting deals by office occupiers led to the rise.

The development of speculative space has also accelerated, again for the first time in more than three years. The volume of available space under construction in the City has doubled since September, risen by 20% in the West End and by 40% in central London as a whole.

Drivers Jonas named Land Securities as the number one London office developer in terms of the amount of space under construction, followed by Hammerson and British Land.

The survey claimed the City could see too strong a return to speculative development over the next 6-12 months.

It said that speculative construction starts in the West End over the six month period to March totalled 468,000 sq ft.

Brisk activity was also recorded in Southwark, Midtown and Paddington, while the Docklands remained bereft of activity.