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Despite the shift to greater home-based and flexible working, the April 2022 Glenigan Construction Review has revealed that starts on new office development projects rose sharply in the first three months of the year.
Data from the construction sector gather by Glenigan revealed that project starts for commercial office schemes rose 28% in Q1 of 2022 compared with the previous year, with projects in London, the North-west and East Midlands leading the charge. Construction on large schemes worth over £100 million more than doubled in value to £686 million compared to January to March 2021, while smaller schemes between £20 million and 50 million rose by 87% to £581 million.
Market analysis by Glenigan mirrors the findings of the RICS, which saw a significant uplift in demand for new office space in their latest commercial property market survey.
Demand for new office space linked closely with the sectors of the economy currently performing best, including the life sciences and fintech which are showing strong demand for spaces between 500 and 1,000 sq m.
While office development in London represented the lion’s share of new project starts in the UK, valued at £1,263 million in the first three months of 2022, the North-west also saw significant growth.
Schemes worth £211 million saw approval in the region in January to March 2022, an increase of more than one-fifth compared to the same period last year. Project starts in the region include the construction of the fourth phase of development at Stockport Exchange, which will see the delivery of a third Grade A office building totalling 64,000 sq ft near Stockport station alongside a 399-space multi-storey car park.