Despite the cloud of uncertainty due to Brexit that looms over the UK, developers are now moving forward thanks to the shocking resilience of Londonโs office market.
Technology companies such as Alphabet Inc. have successfully convinced office developers that it is safe to break ground. For example, Land Securities Group Plc is redeveloping a building on Sherwood Street, its first project in five years without having tenants in advance.
โLondonโs office market remains resilient in the face of uncertainty as we witness an encouraging increase in new construction starts,โ said Mike Cracknell, a director at Deloitte Real Estate. โThis is testament to developersโ continued confidence in Londonโs office leasing market long term.โ
Demand for offices in Londonโs financial district has also exceeded expectations since Brexit. Private equity funds, real estate investment trusts, and international developers have been snatching up vacant buildings left and right.
Companies such as asset manager PGIM and Allied London have also jumped on the bandwagon for locations on the south bank of the River Thames along the London skyline.
Still, some analysts are remaining ย cautious, such as Tom Sharman, head of research and strategy at Royal Bank of Scotland Group Plc, who said that take-up has been pushed by serviced-office companies and remains skeptical of the London office market.
