The pipeline of fit-out work in central London has more than doubled in the past year, according to Metropolis Property Research
In research, unveiled this week at the Mipim property event, it found that there were 6.3 million ft2 of projects in the pipeline, compared with 3 million ft2 last year, with 3.4 million ft2 set to go to market this year.
But Andy King, managing director of property research company Metropolis, cautioned against drawing positive conclusions for the long-term buoyancy of the sector. He said: “The danger is that the current mini boom, being fuelled by relatively cheap space and a shortage of premier office space, will soon end and then there may be a slack occupier fit-out market in 2011/2012 until more premier space is on-stream as part of the new property cycle.”
Despite his warning, ISG chief executive David Lawther last week pointed to encouraging signs of life. “We have been through a 50% decline in the London market from peak to trough, but we’re starting to see major developments delivering products. There is definitely a sustainable level of activity moving forward.”
In addition to the 3.4 million ft2 this year, a further 2.9 million ft2 could be ready in the medium term, including the 1.9 million ft2 JP Morgan headquarters development at Canary Wharf. Another potential job is the 290,000 ft2 fit-out of the new Sainsbury’s headquarters at King’s Cross. Both deals are yet to be signed off.
Overbury, the fit-out arm of Morgan Sindall, retained the largest share of the market with 32%, while ISG remained in second place but saw its share fall to 21% from 25%. Como, which is part of Mace, remained in third place with 13% of the market while 8Build and StructureTone have 7% each.
Meanwhile, Gensler slipped down the architects’ table from first to third place, owing to the lack of development starting on the JP Morgan headquarters. Pringle Brandon has taken over the top spot with an 18% share of the market, pushing MCM, which has just one project less, into second place.
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