'Delays' to Pinnacle, Cheesegrater and Walkie Talkie would open window for other new offices
Potential delays to the Pinnacle, Walkie Talkie and Cheesegrater skyscrapers could create a window for new office developments in 2014 and 2015, according to a report out today.
The predictions come in the latest London office crane survey by property consultants Drivers Jonas Deloitte.
The findings say that 75 per cent of all the space under construction in the City is made up of the ‘big three’ towers, including 20 Fenchurch Street (Land Securities’ Walkie Talkie) and The Leadenhall Building (British Land’s Cheesegrater, being built by Laing O’Rourke), both scheduled to complete in 2014.
Due to funding problems, Drivers Jonas Deloitte said it does not expect the tallest skyscraper, Bishopsgate tower, otherwise known as The Pinnacle - being built by Brookfield Multiplex - to be completed now until 2015.
Work was halted on the Pinnacle after construction reached ground level. Developers Arab Investments said in March that funds for the £1bn project were secured, before the company announced in June that work would restart.
The Pinnacle was originally planned to be complete by 2013, but this had already been set back to 2014. The Brookfield Multiplex website now says the completion date is 2015.
The crane survey says while all three skyscraper schemes remain on track at the moment, the market perception is that some delivery dates could move back. Given the size of the three schemes, if this happens there would be unmet demand for other new office space.
“There may yet be a larger window of opportunity to deliver new buildings into the market in this period,” it says.
Looking at the commercial sector as a whole, the report suggests the ‘big three’ towers may not be the only commercial developments to stall. It says uncertainty caused by the global economic crisis is forcing companies to switch to a “cost-control mentality” that will see a drop in demand for new commercial space and the release of existing offices.
Concerns came despite a continued resurgence in the London commercial sector in the six months to September, with 22 new starts representing an 11 per cent increase in the overall construction volume. The survey reports more refurbishments and significantly smaller schemes than six months ago, with the average value falling by 66 per cent.
But it says 2012 will deliver the least amount of City office space in a decade, at 443,000 sq ft.