London may be in for a tougher twelve months in the office market according to a leading property agent.
Property agent DTZ have issued a warning to companies who are chasing office space in London over the coming twelve months.
Martin Davis, the Head of Research at DTZ has claimed that 2011 will be a very lean year for new or refurbished office space in the City.
Levels of office floor space will drop dramatically during 2011 compared to the amount of office space created in 2010.
While there was 2.5 million square feet of office space created or renovated during 2010 in the nation’s capital, this figure is expected to plummet by almost 50% with only 1.3 million square feet of office space being created in 2011.
All of the 1.3 million square feet created this year will come from only five buildings which will be completed during the next twelve months.
Buildings due to be completed include Gerard Ronson’s Heron Tower which will stand at 440,000 square feet will be one of the sites completed. Hines’s Cannon Place and the new headquarters of Rothschild are two of the other sites which will be finished this year.
In 2010 Land Securities and British Land agreed a deal for joint venturing with regards to the Cheesegrater and Walkie Talkie skyscrapers which should have been completed during this year. The deal should see both buildings completed by 2014.
DTZ also believe that the lack of new office space may well result in the rent increasing. There may well be good news for the owners of buildings still under construction as pre-leasing contracts may be driven upwards as firms look to hire office space ready to move into when the buildings are finished.