Construction work in central London has reached the highest level for eight years, demonstrating the resilience of the city’s key business districts despite warnings that companies will leave because of Brexit.
The amount of office space being built in central London stands at 14.8m sq ft across 120 projects, up more than 4% compared with six months ago and before the EU referendum.
Bank bosses have warned that the industry could withdraw operations from London due to the uncertainty surrounding Britain’s departure from the European Union, with Sir Howard Davies, the chairman of Royal Bank of Scotland, the latest to speak out.
However, Chris Lewis, head of occupier advisory at Deloitte Real Estate, said the figures showed the capital was resilient. Projects that have approved since the EU vote in June include the 62-storey 22 Bishopsgate, which will be the tallest building in the City of London.
Nonetheless, there is evidence that the uncertainty caused by the Brexit vote has had an impact. The volume of construction projects started during the past six months fell by 42% compared with the previous six months, and completion dates have slipped by an average of three months, according to the London office crane survey by Deloitte. Just two of the 40 projects started in the past six months have a business signed up to occupy them.
Lewis said: “Brexit is just one of the components around occupier demand and take-up – the other elements include the broader economic uncertainty. London is home to international businesses and, with big elections in the US and mainland Europe as well, there is the potential for quite a lot of change and disruption.
“London is massively resilient. The considerations around what an occupier does is about more than Brexit, it’s just one of the things in the melting pot.”
Of the 14.8m sq ft under construction, 8.8m sq ft is in the City of London, with 1.7m sq ft in the West End and 1m sq ft in the Docklands, which includes Canary Wharf.
There is also 2.9m sq ft of space being built in three areas earmarked to become business hubs – Battersea, White City and Stratford. About 65% of this space has been pre-let, with Apple to open an office in the revamped Battersea power station.