The recovery in commercial construction sectors will undoubtedly lag that of private housing, according to Rebecca Larkin, an economist with the Construction Products Association.
Office construction was particularly hard-hit as business confidence plummeted during the recession. Output in 2013 was still almost 50 per cent below the peak levels recorded in 2007/08.
So far the tentative recovery has been geographically fragmented, spearheaded by numerous high-profile projects in London and the South East such as 20 Fenchurch Street (the Walkie-Talkie), the Leadenhall Building (the Cheesegrater) and 100 Bishopsgate, which have been accompanied by the commercial rent increases and a high proportion of office pre-lets that highlight the strength of demand in the capital.
Regional office markets are poised for a revival from 2015 as firmer economic growth boosts company expansions to absorb existing surplus floor space and spur new build office activity throughout UK cities.
Signs of a nascent pickup in developer sentiment outside London are already apparent: No 1 Spinningfields in Manchester secured planning permission in May; office construction in Aberdeen has been brought forward in response to record investment in the North Sea oil and gas industry; whilst the Midlands will benefit from the redevelopment of office space in Birmingham’s central business district.