Approved Office Space

Huge Amount Of Approved Office Space Means Investors Remain Upbeat

UNITED KINGDOM – Investors remain bullish on the outlook of the City of London’s office property market as fresh government data show that over 1 million sq ft of proposed office premises have been granted approval so far this year, reported the Evening Standard on Wednesday (17 February).

“Developers remain very eager to invest in the Square Mile, so much so that we recently employed additional planners to meet demand,” said Alastair Moss, Head of the transportation & planning committee at the City of London Corporation.

The Square Mile (City of London) will remain as a “world-class destination of outstanding office developments which are fit for the future and adapt to post-pandemic trends,” he added.

The government body revealed that about 1.2 million sq ft of office premises, either new or upgraded within new projects were given the greenlight to date this year. That’s a good figure as it’s just the start of 2021 and it’s already nearly half of the 2.6 million sq ft recorded for the entirety of 2020.

The lion’s share of the amount is made up of 2 office towers to be built by Hong Kong-based developer Tenacity International Group: a 30-storey building (366,000 sq ft) in 70 Gracechurch Street, and another 34-storey tower (775,000 sq ft) next to it.

Moreover, the larger development will come with over 1,000 bicycle parking spaces, a garden-cum-public gallery on the 29th and 30th floor, as well as a direct pedestrian accessway to Leadenhall Market.

“We believe that high quality office space with the latest sustainability standards and technological innovations will remain in demand post pandemic,” said Tenacity International’s CEO Patrick Wong.

While the COVID-19 pandemic and the ensuing work-from-home (WFH) trend has dealt a severe blow to the commercial property market, some developers and property consultancies think that demand for the newest and best office space would remain healthy.

“Most occupiers will gravitate to the best stock post pandemic, and so developers are looking to deliver schemes to take advantage of anticipated supply shortage in 2025 onwards,” said Philip Pearce, Head of central London leasing at property consultancy Savills.

Toby Courtauld, CEO of developer Great Portland Estates, shared that as the UK emerges from lockdowns, the company is witnessing significant demand for new, eco-friendly, Grade A office space from firms that recognise London’s continued importance as a global business hub.

Notably, Great Portland Estates has recently committed to a significant office revamp at 50 Finsbury Square.

“For some time, we’ve been expecting a shortage of this space and have already committed to our exemplar project at 50 Finsbury Square to take advantage of this anticipated scarcity. Beyond that, we have a further 700,000 sq ft in our near-term development pipeline, delivering on the needs of tomorrow’s occupiers,” added Courtauld.

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