Consultant anticipates supply gap later in decade
New office construction starts fell 35% in the capital in 2025, according to Deloitte.
The consultant’s latest London Office Crane Survey showed starts stood at 4.8 million sq ft in 2025, with refurbishments accounting for 66% of all new start volume.
A total of 7.1 million sq ft of new office space in central London was built last year, which was up 8% on 2024 and the third highest annual volume in the survey’s 30-year history.
However, its analysis points to a “more selective” development pipeline in the coming year. The 4.8 million sq ft new starts figure was below the five-year average of 6.5 million sq ft.
Deloitte highlights a potential supply gap from 2027 to 2030, as a result of fewer new schemes starting and completing due to developers only bringing forward the most robust opportunities.
However, developers demonstrate confidence about the resilience of demand with 58% anticipating their pipeline to increase over the next 12 months.
“Developers are once again facing rising construction costs and financing uncertainty alongside planning complexities associated with delivering projects in the capital,” said Philip Parnell, partner and head of real estate valuation at Deloitte.
“The continued shift to refurbishments goes beyond sustainability requirements and represents challenges around scheme viability, delivery risk and addressing occupiers’ evolving needs around quality and flexibility.”
No comments yet