London office market hit by economic turmoil, says Hammerson

Demand for office space in London has been hit by recent economic turbulence, developer Hammerson has said.

In an interim management statement covering the last four months from 1^st July, the company said it remained cautious about London and would not be launching any speculative office developments.

The stance contrasts with bullish rivals Land Securities, which has pushed on with speculative London schemes this year including the 37-storey Walkie Talkie.

Real-time Share PriceThe developer added it was still in negotiations with law-firm CMS McKenna about a pre-let for a Foster + Partners-designed 54,940m² commercial scheme in the City called Principal Place, which will replace the existing Bishops Place development.

Refurbishment work will begin shortly at 99 Bishopsgate, also in the City, after Deutsche Bank vacated the majority of its 13,500m² offices.

The developer said it was positive about prospects for its regional retail portfolio and had submitted planning applications to extend Westrmoreland retail park in Cramlington, St Oswald’s retail park in Gloucester and Drakehouse retail park in Sheffield.

Work has begun on the extension and reconfiguration of Queensgate shopping centre in Peterborough, which is scheduled to open next autumn.

In total Hammerson submitted planning applications for 26,000m² of asset improvements and reconfigurations in its retail parks portfolio.

The developer said it was pleased occupancy remained high, at 97.1%, down only marginally from 97.2% on 30 June.