Have you noticed how many cranes there are on London’s skyline at the moment?
Construction is booming as there is an increase in building activity across the centre of the capital; from Westminster to St Paul’s. In the first six months of this year, that activity has increased by 24% based on a comparison with the same period last year. Space, especially high quality office space, is in short supply. Now business feels as though it can build it new, rather than make do.
Deloitte Real estate conducts a regular Crane Survey, using this building activity as a barometer for the economic health of the city itself. And this year it’s found it to be in robust health. There were 31 new starts in the first six months of the year, taking the total new office space under development in London to 9.5m square metres.
Over a third of that space has already been let. That means businesses are already ready to move in and set up shop, many new start-ups or established firms looking to expand to prime office retail space. This is the second highest leap in two decades. The City itself is most popular, of the ten new constructions underway half of them are pre-let. Office take-up in The City has increased by 64% in the first quarter of the year, compared with the same period in 2014. Space is far more scarce, so the appetite has become stronger.
What does it mean? New office builds suggest that business is expanding and shaking off the fears of economic frailty and embracing growth. It suggests renewed confidence, jobs creation and a desire to rev up London’s recovery.
A number of key sectors are fuelling this confidence and outperforming the rest. Construction is growing and expanding and contributing to London’s success. It’s a tried and tested path out of an economic downturn to invest in infrastructure projects to boost construction and the infrastructure pipeline, HS2 and CrossRail have continued to do this. Once builds are finished then fit out begins with more jobs being created as the finishing touches are offered to buildings and new offices.
At the beginning of this year the CBI predicted the creative and digital economy would prove to be key to London’s growth. This has proved to be the case with tech firms establishing themselves outside of the Silicon Roundabout/Shoreditch area and sprouting new developments. Co-working spaces are attracting elite digital firms like Task Rabbit at Second Home and are providing flagship developments designed to be the flag bearers for the capital’s digital revolution.
Meanwhile The City’s more traditional businesses are seeing a renewed position; financial and professional services like banking, legal services and accountancy are enjoying a boom.
This growth means new workers are attracted to the capital to fill new jobs. With regular clients across a wide variety of business sectors, Clarendon provides support for firms attracting new members of staff, providing extended stay temporary accommodation in the heart of the capital. A flexible solution it enables businesses to welcome the newest members of their team quickly and easily by giving them a comfortable “home from home” in the shape of a serviced apartment while they look for a more permanent home. London’s business growth has a welcome impact on many different industries.