London office rents are set to reach an historic high by 2018, fuelled by demand from the technology, media and telecoms (TMT)  sector. Demand for office space by technology and media firms across central London was more than double of the finance sector in 2013, with major deals signed by Google, Amazon, Facebook, Twitter, News Corp, and Ogilvy & Mather. According to data from Knight Frank, record levels of overseas investment are helping London build its reputation as a global hub. Geographically, it is not just the City and the West End that are seeing a massive surge in demand; take-up in Docklands increased by nearly 20 per cent last year, while completely new districts are emerging which include London Bridge, Battersea and Nine Elms. (more…)

The construction industry has had its best month for almost six-and-a-half years; including the largest increase in commercial activity since August 2007. Although the upturn was led by house building, which increased for the twelfth successive month; surging growth was also recorded for commercial construction and civil engineering, due to increased spending by business on infrastructure, office space, industrial units and retail outlets. The Markit/CIPS Construction PMI™ rose from 62.1 in December to 64.6, its highest since August 2007 – one of the strongest growth rates seen since survey data were first collected in 1997. The index shows that while house building has been rising for a full year, commercial building and civil engineering only started recovering in earnest last summer. However, growth of both has now accelerated sharply. (more…)

The Centre for Cities has today published its seventh annual report into the economic conditions in the 64 largest urban areas in the UK. The Cities_Outlook_2014 report paints a picture of a patchy economic recovery across the UK, with many cities such as Edinburgh, Birmingham, Manchester, Nottingham, Liverpool and Leeds seeing an upturn in their economies, but one that lags significantly behind that of  London. The capital continues to disproportionately attract investment and people from across the UK and overseas, sometimes to the detriment of other towns and cities. The report argues that more power and finding needs to be devolved away from London to ensure that the UK enjoys a sustainable and balanced economic recovery.

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In the week the ONS announced the UK unemployment rate has dropped to 7.1 per cent, comes more evidence of the recovery from the built environment. Figures released by construction industry analysts Glenigan have revealed that the value of UK projects put on hold during 2013 was the lowest since the start of the recession in 2008. In total, £12 billion of potential projects were put on hold last year, compared to £47 billion in 2012 and a peak of £80 billion in 2009. According to Glenigan economist Tom Crane, the value of stalled projects have been falling since 2009, but the latest figure shows the continuation of an encouraging trend, with a 16 per cent fall in the value of underlying projects.   (more…)

Last year marked a six year high in commercial property investment across the UK according to a new report from property information providers CoStar, driven by increases in regional markets and a sharp upturn of interest in Central London from overseas investors. A total of £52.7 billion of transactions was completed across the UK in 2013, albeit that two-thirds of investments were made in London and the South East of England. It was also a year for record breaking deals, notably the Broadgate office development in the City (above) and More London on the South Bank, each of which were valued at £1.7 billion. London was particularly attractive for Asian investors who CoStar claim see it as a safe haven and invested £9.2bn, up 80.6 percent on 2012.

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Developers have submitted plans for the development of a new tower on the site of an existing office building in Manchester city centre. Allied London is looking to create a new 19 storey office in Spinningfields, the city’s troubled £1.5 billion business district which ran into development problems at the height of the recession between 2007 and 2010. The new building a will offer over 340,000 sq. ft. of office space and is designed by Ian Simpson Architects who were responsible for the design of the Beetham Tower. The ground floor is also likely to incorporate retail outlets, cafes and restaurants. A final decision on the application from the local authority is due in April. Quay House, the current building on the site, is argued by the developer to be under-occupied and outdated.

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