{"id":4390,"date":"2024-07-25T01:00:00","date_gmt":"2024-07-25T00:00:00","guid":{"rendered":"https:\/\/www.londonofficespace.com\/buzz\/?p=4390"},"modified":"2024-07-25T07:01:41","modified_gmt":"2024-07-25T06:01:41","slug":"new-developments-in-london-office-space-central","status":"publish","type":"post","link":"https:\/\/londonofficespace.com\/buzz\/new-developments-in-london-office-space-central\/","title":{"rendered":"New Developments in London Office Space: Central"},"content":{"rendered":"

\"A<\/p>\n

Knowing the status of the central London office development pipeline is essential for businesses looking to stay ahead in one of the world\u2019s most dynamic real estate markets. By understanding the current trends and future developments, businesses can make informed decisions about their office space needs and take advantage of emerging opportunities.<\/span><\/p>\n

In this article, we take a look into upcoming developments and what they mean for the Central London office leasing market.\u00a0<\/span><\/p>\n

Central London offices development pipeline<\/b><\/h2>\n

According to data from the latest<\/span> London Office Crane Survey<\/span><\/a>, which looks in detail at the city\u2019s development pipeline, the main highlight during the second half of 2023 was the record volume of square feet under construction. As of Q4 2023, there were more than 5 million square feet of new builds underway in central London, the highest amount since 2005. That figure represents a 16% increase over a six-month period. The report also identifies increases in project size, going from averages of 88,000 square feet in early 2023 to 119,000 square feet of properties in late 2023.<\/span><\/p>\n

<\/p>\n

In addition, there are a further 5 million square feet scheduled to start being built soon. Most of the future developments are located in <\/span>the City<\/span><\/a>, where 2.4m square feet are planned to be built over 16 different projects.\u00a0<\/span><\/p>\n

The second location in the Capital with the highest increase in development pipeline volume is <\/span>Southbank<\/span><\/a>, bordering the River Thames. It shows a 19% six-month increase and totals 385,000 square feet under construction.<\/span><\/p>\n

In the West End, there are 1.1 million square feet underway, which is a 13% decrease over early 2023 figures, but the decline is mostly due to multiple project completions during the second half of 2023.<\/span><\/p>\n

Moreover, the report highlights the record-high number of refurbishment projects currently in the works. The area with the highest amount of office refurbishments is the City, with 14 schemes, one of which is the largest of its kind in the central London area. In total, there are 34 refurbishment projects in the area, amounting to 3.3m square feet.<\/span><\/p>\n

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Office development projects in Central London\u00a0<\/b><\/h2>\n

The most notable office development projects in the central London pipeline include:<\/span><\/p>\n

125 Shaftesbury Avenue<\/b><\/h3>\n

The redevelopment at<\/span> 125 Shaftesbury Avenue<\/span><\/a>, not far from the British Museum, is a ten-storey building that was built in 1980 and already underwent refurbishment in 2018. Prior to the latest upgrade, the building was leased to coworking operator WeWork. The one-acre site is set to be redeveloped to even higher standards, and will include 140,000 square feet of office space and a further 40,000 square feet of retail.<\/span><\/p>\n

The Network building<\/b><\/h3>\n

The<\/span> Network building in Fitzrovia\u2019s Knowledge Quarter<\/span><\/a>, whose demolition and subsequent redevelopment will give way to 139,000 square feet of speculative space with a completion date set for Q2, 2025. The project will also feature some retail space (5,000 square feet). This building will have<\/span> strong sustainability credentials<\/span><\/a>, as it\u2019s targeting an Outstanding BREEAM rating and has been planned following low-carbon building design principles, including rainwater harvesting systems, habitat creation through the addition of green spaces, and renewable electricity sources.<\/span><\/p>\n

6-10 St Andrew\u2019s Street<\/b><\/h3>\n

The Great Portland States project at<\/span> 6-10 St Andrew\u2019s Street<\/span><\/a> is located in the heart of the City. This development involves the extension and refurbishment of a 46,000 square feet building. Once completed, it will provide managed office units ranging in size from 1,200 to 5,800 square feet. The building will benefit from excellent transport links being minutes away from underground and Elizabeth line stations, and has a planned delivery date for the end of 2024.\u00a0<\/span><\/p>\n

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55 Bishopsgate<\/b><\/h3>\n

55 Bishopsgate<\/span><\/a> will be the third tallest skyscraper in the Square Mile at 883 feet spread over 63 floors. This is not just a commercial property, but a<\/span> mixed-use real estate complex<\/span><\/a> featuring 800,000 square feet of office space that could accommodate up to<\/span> 7,000 people<\/span><\/a>. The project will be a notable addition to the central London property market, as it\u2019s estimated that it will supply 14% of demand in the Square Mile by 2036. The development will also incorporate public space with access to a rooftop and an urban garden. 55 Bishopsgate will have<\/span> exemplary sustainability standards<\/span><\/a> from facade design to biodiverse landscaping with water reuse systems.<\/span><\/p>\n

55 Old Broad Street<\/b><\/h3>\n

55 Old Broad Street is a mixed-use development near <\/span>Liverpool Street<\/span><\/a> Station totalling 434,000 square feet of space, of which 360,000 square feet will be office space distributed across 23 floors. The project stands out for the careful<\/span> repurposing of large amounts of existing materials<\/span><\/a>, which is not only a sustainable practice, but is also expected to deliver savings of nearly 2,000 tonnes of carbon. This will be an all-electric building designed to comply with ESG standards.<\/span><\/p>\n

40 Leadenhall<\/b><\/h3>\n

40 Leadenhall<\/span><\/a> is another large-scale development in the City with nearly 900,000 square feet of space featuring private offices, coworking spaces, retail and <\/span>wellness<\/span><\/a> facilities. Approximately 80,000 square feet will be devoted to amenity space. The building\u2019s offices are set to be delivered in Q4 20204 and will have a capacity for 10,000 people over 34 storeys. This project is also<\/span> targeting top sustainability certifications.<\/span><\/a><\/p>\n

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Impact of new developments on the Central London office leasing market<\/b><\/h2>\n

Despite challenging market conditions caused by the adoption of hybrid work and a trend towards downsizing, the latest developments show that the UK Capital’s market is still attracting significant investment.\u00a0<\/span><\/p>\n

\u00a0The City and the West End remain very resilient markets<\/span><\/a> and there\u2019s no sign of Grade A appetite declining in the near future. In fact, demand concentrates around these assets, which is likely to further solidify the trend towards a two-tiered market.<\/span><\/p>\n

As for refurbishments, these are expected to continue on the rise, as many office buildings need to avoid obsolescence in anticipation of increasingly strict Minimum Energy Efficiency Standard (MEES) regulations. Refurbishment projects will continue playing a crucial role in meeting demand in this market, since already<\/span> 62% of all central London office stock is over 20 years old<\/span><\/a> and possibly in need of upgrades to comply with MEES.<\/span><\/p>\n

The positive outlook for office space in new developments is further confirmed by high pre-letting rates. According to the latest London Office Crane survey,<\/span> 37% of projects under development are already pre-let.<\/span><\/a><\/p>\n

In addition, analysts expect that occupier demand will remain high for <\/span>sustainable<\/span><\/a> and smart office developments. Most developers are confident they will meet the net-zero target by 2040 in their central London developments. However, this comes with significant cost increases, which are likely to be passed onto occupiers with a subsequent increase in rental rates.<\/span><\/p>\n

There is data already pointing in this direction, since in Q1 2024<\/span> more than 40% of leases were quoted at higher rates than prime rents<\/span><\/a> compared to the previous year. Moreover, analysts forecast that nearly 40% of all the office stock coming back to the market in 2027 due to expired leases will require upgrades, which will increase the base rates.<\/span><\/p>\n

\"A<\/p>\n

Going forward, the rental rate increase for premium assets is expected to be the predominant theme in the market. This will be the result of the above trend towards MEES-compliant office upgrades, as well as a very<\/span> limited development pipeline for 2025 and 2026<\/span><\/a>. As the supply-demand ratio tightens, tenants will become more likely to start conducting their office search well in advance and earlier than they do currently to secure the best deals. Now is a good time to start your<\/span> London office space<\/span><\/a> search!<\/span><\/p>\n

Looking for a newly built office space in central London?<\/i><\/b><\/p>\n

Has the above got you inspired to look for a newly built, private office space in central London? Or perhaps you’re looking at serviced offices with flexible agreements in <\/span>West London<\/span><\/a> or a <\/span>Greater London<\/span><\/a> borough?<\/span><\/p>\n

Whatever your requirements are, we provide a diverse range of traditional office space or <\/span>workspace<\/span><\/a> with varied amenities to meet the demands of any business.<\/span><\/p>\n

Please call us on 020 3965 9617 to talk with one of our friendly and well-informed office space consultants. Our workspace specialists are here to help you locate the best office space in London to suit your individual needs.<\/span><\/p>\n

In the meantime, you can also read some of our most recent stories about business, commercial real estate, and the London office market, below.<\/span><\/p>\n

Benefits of Modular Office Furniture for Flexible Workspaces<\/span>
\n<\/span><\/a>How to Upgrade Your Office Space in Central London<\/span>
\n<\/span><\/a>Navigating Central London Office Market Trends<\/span>
\n<\/span><\/a>Emerging Areas for Affordable Office Space: London<\/span>
\n<\/span><\/a>Historical Buildings with Offices to Rent in Central London<\/span>
\n<\/span><\/a>5 Expert Tips on the Best Way to Find Commercial Office Space to Rent in London<\/span>
\n<\/span><\/a>Sustainable Workspaces: How Office Spaces in London Are Adopting Eco-Friendly Practices<\/span>
\n<\/span><\/a>Mastering the Art of the Office Seating Plan<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Knowing the status of the central London office development pipeline is essential for businesses looking to stay ahead in one of the world\u2019s most dynamic real estate markets. By understanding the current trends and future developments, businesses can make informed decisions about their office space needs and take advantage of emerging opportunities. In this article, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,363,175,11,369,90,91],"tags":[404,356,609,13],"_links":{"self":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts\/4390"}],"collection":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/comments?post=4390"}],"version-history":[{"count":1,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts\/4390\/revisions"}],"predecessor-version":[{"id":4391,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts\/4390\/revisions\/4391"}],"wp:attachment":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/media?parent=4390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/categories?post=4390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/tags?post=4390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}