As London rebounds from the pandemic, construction is poised to take off. This month, Matt Barker the MD of CSB explores London’s history of rebounding from crises and what the future holds.
London has always bounced back from adversity, not just surviving wars, recessions and plagues but evolving and growing. Today, it is happening again.
What’s driving the recovery this time?
The capital has always been a centre for big real estate projects, and the early evidence suggests this will continue post-Covid. Several landmark projects are progressing despite the pandemic, and new office starts recorded in Deloitte’s spring 2021 crane survey had a total area of 3.1m sq ft, above the long-term average.
It looks like several factors will play a part in this latest chapter of the city’s real estate recovery story.
- Factor 1: The return to work
- Factor 2. The hybrid worker
- Factor 3. Adapt or die
With office vacancies in London’s financial district a third higher than after the 2008 crash, there is an awful lot of space that could be repurposed. That shapeshifting could take a few forms.
- Free up office space for leisure and retail.
- Convert traditional one-person-one-desk layouts to flexible floorplans.
- Turn corporate office space into smaller workspaces or managed offices for SMEs.
There is plenty of stock in managed offices available, but demand is expected to return as redundant workers start new ventures and corporates look for flexible and distributed space.
The Corporation has created a £50 million fund to assist small businesses, which might also stimulate demand for workspaces.
Transforming Commercial Property
It is more than a year since the first UK lockdown, and investors and developers are taking the brakes off, which is great to see. But more construction work comes at a cost.
New buildings and refits generate construction traffic, and that sits uncomfortably in one of the world’s busiest cities. Fatalities, injuries, pollution and financial costs are among the impacts that follow from moving materials around London inefficiently.
It does not have to be this way. By using construction logistics intelligently, we can minimise the impact of construction traffic.
We know how. We are already doing it. The challenge is rolling it out industry-wide.