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Office building revival 'will not start until 2013'
3 Jun 2009Developers will not start building any new offices until 2013 although they should really start as early as 2011, a report says.
Property agent Jones Lang LaSalle is predicting a near-total freeze from the end of next year once the current stream of office construction - commissioned before the recession - comes to an end.
About 7.6 million square feet of office space - the equivalent of 15 Gherkins - is due for completion by the end of next year.
But there is little in the pipeline beyond that and the JLL report - Pushing The Button: Economic Rents In UK Office Development - suggests developers should take the plunge in 2011 when building costs, driven down by a lack of demand amid the global recession, are at their lowest.
Damian Corbett, head of West End investment at JLL, says: "Few schemes will commence in the short to medium term Supply will erode quickly from 2011 as a result of limited new additions to stock.
"Rents - and build costs - will begin to rise again from 2012 and there is a risk that developers who wait for low supply and proven rental growth will miss the boat in terms of building for maximum profit."
