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New central London office construction falls 50% in six months - Deloitte

Mon, 23rd Nov 2020 00:01

LONDON, Nov 23 (Reuters) - Construction of new office space
in central London fell by 50% in the six months to the end of
September as the impact of the COVID-19 pandemic on major cities
kept developers away, according to a survey published on Monday.

The amount of new space under construction plunged to 2.6
million square feet, taking volumes back to their historical
averages after a pre-pandemic boom, Deloitte Real Estate's
London Office Crane Survey showed.

The survey also showed a higher-than-average 40% of new
construction was pre-let, signalling less speculative building.

At least six speculative schemes were put entirely on hold
pending more clarity, with many more postponed until 2021,
Deloitte said.

Developers reported that weak tenant demand was the major
obstacle to starting any new project after the pandemic forced
many people to work from home, leaving parts of the capital
almost deserted.

The shift to working from home has prompted many companies
to consider a longer-term, more flexible approach to office
attendance, prompting questions over future demand for tower
blocks in the capital.

(Reporting by Kate Holton
Editing by William Schomberg)

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