New office construction boom as demand for premium space grows

LONDON'S recovering office construction sector has begun to boom with developers starting work on buildings with a total of 2.5 million sq ft of space in the first quarter of the year, according to new figures today.

- Jonathan Prynn

Hopes that interest rates will start to fall later in the coming months combined with strong demand for Grade A space have helped encourage a burst of activity after the construction doldrums of the previous year, particularly after Kwasi Kwarteng's mini-Budget of September 2022.

Data from analysts CoStar show ground was broken on 2.5 million sq ft of space between January and March, more than 50% higher than the 10-year quarterly average and one of the highest quarterly figures of the past five years.

It follows a strong autumn with 4.5 million sq ft of office starts over the six months.