Home Features OFFICE CONSTRUCTION: regional recovery dynamics

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.