UK markets closed

Brexit fails to massively slowdown the demand for London office building

Lianna Brinded
Head of Yahoo Finance UK
A general view looking across the City of London towards Canary Wharf on March 19, 2019 in London, England. (Photo by John Keeble/Getty Images)

New London office building hit a post Brexit referendum high, according to Deloitte Real Estate's London Office Crane Survey.

The report, which is a key barometer looking at construction in London, revealed that with 13.2 million square feet of space under construction, new office building in central London reached a three year high — up 12% on that figure six months ago.

"London's office market remains resilient in the face of uncertainty as we witness an encouraging increase in new construction starts," said Mike Cracknell, director at Deloitte Real Estate.

"This is testament to developers' continued confidence in London's office leasing market long-term."

Chart: Deloitte

There were some other notable upticks in the London office building sector, such as 55% of space under construction is already let. Financial Services are pre-letting more space and technology, media and telecoms (TMT) also further increased its share, from 29% to 35%, said Deloitte.

Chart: Deloitte

However, Deloitte warned that “even though there was an up-tick in office construction levels, the overall pipeline under construction and proposed schemes declined by 23% over the past two years. What does it mean to the London office market? And is the tide about to turn for second-hand office space?”

Brexit was delayed up until 31 October this year.

Brexit supporting UK senior minister, international trade secretary Liam Fox, is set to say in a speech at the International Financial Services Forum today that the City of London will "emerge fitter, stronger and more dynamic than ever."

"We recognise your difficulties, we recognise your importance, and we want to work with you to give certainty and stability wherever possible as we move towards our new deep and special partnership with the European Union," he will add, according to excerpts of his speech.