Construction in London has slowed by 42% in six months, according to Deloitte’s Central London Crane Survey.
While total office construction stands at 14.8m sq ft, up by 4%, new starts during the six months of the survey have reached 40, down from the record high of 51 in the summer.
Starts have also been fuelled by refurbishment projects which account for 70%. The City has the highest number of starts, with construction beginning on 14 schemes.
The survey has also recorded a 26% fall in the size of schemes started from 95,000 sq ft to 70,000 sq ft.
Uncertainty caused by the EU referendum has weighed on the market, with developers seeing reduced tenant demand as a key factor impacting decisions.
Take-up levels at the end of Q3 were 37% from the same point last year, while space under offer has fallen by 22% since the beginning of 2016.
Financial tenants still account for the most space at 42% of leased space under construction.
Uncertainty has also prompted developers to shift out the delivery of schemes to 2019 and 2020.
Construction costs are expected to rise next year due to the fall in value of UK sterling.
Despite this, Battersea Nine Elms, Stratford and White City have all been earmarked as areas of growth.
May 2016: London office starts hit record high
• To send feedback, e-mail shekha.vyas@estatesgazette.com or tweet @ShekhaV or @estatesgazette
