Construction Of 10 Office Towers

London Approves Construction Of 10 Office Towers

UNITED KINGDOM – Top officials of the City of London have given the go signal for the construction of 10 new office buildings, including one known as locally the Square Mile, which will surpass all existing office towers in the district by height, reported The New York Times on Thursday morning (14 December, SGT).

In total, over 5 million sq ft of office space is already under construction, and there’s another 5 million in the pipeline, showing that developers are investing on new workspaces.

Shravan Joshi, Chairman of the City of London Corporation’s planning and transportation committee, said there’s still capacity for more office space, estimating that the city will require 13 million sq ft of additional workspace by 2040.

The city’s governing body based its projections on a report it commissioned that forecasted a huge growth in jobs in the district, and in turn, this would support demand for office space, even if hybrid work remains the norm.

In fact, Jones Lang LaSalle (JLL) revealed that while the vacancy level for newly completed office towers is just 1.4 percent, the overall vacancy rate in the City of London reached 9.5 percent in Q3 2023, exceeding the long-term average of 5.7 percent.

JLL’s Head of the central London office agency Chris Valentine explained that real estate developers face a “favourable environment,” despite economic pains, such as inflation and high interest rates.

“Much of the existing development pipeline in the City of London is already pre-let, under offer or in negotiation.”

He expects demand for “best in class” office buildings, with eco-friendly credentials and the latest amenities, would remain strong between 2025 and 2030.

However, the construction of new office buildings could lead to an oversupply or higher vacancy at older office properties, as tenants take flight to newer premises. And there is always the risk that businesses will move to other business districts, including Canary Wharf in the east.

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