Number of major applications approved also beats five-year record

The City of London saw the highest number of planning applications for a decade this year despite recent studies showing a marked slowdown in commercial construction activity across the capital.

Planners at the City of London Corporation said the figures were a signal of “huge and rising demand” for premium office space in the Square Mile.

The number of major applications, those containing more than 100,000sq m of floorspace, is also the highest in five years and up 36% on last year, according to the City.

It comes two weeks after Turner & Townsend Alinea published research showing the capital’s commercial sector was facing a long-term decline with output now a third smaller than it was during the pandemic.

130 new 2

Wilkinson Eyre’s 130 Fenchurch Street was approved in September

But the consultant’s London market report also found signs of renewed confidence in the office sector including a slight dip in the office vacancy rate from 8.1% to 7.8% during the second quarter of this year and rising take-up by occupiers for large transactions.

According to Avison Young, the office vacancy rate is much lower for grade A office towers in the City at between 1.9% and 2.6% amid signs that the asset type is nearing capacity, with 22 Bishopsgate now fully occupied.

Major tower schemes currently underway including Keltbray carrying out strip out work at the site of the 74-storey 1 Undershaft, set to be the tallest building in the Square Mile, although a main contractor is not expected until later next year or 2027.

Other large schemes set to start on site early next year include 85 and 60 Gracechurch Street, due to be built by Mace and Bovis respectively.

The City granted planning permission to more than 500,000sq m of office space over the past year, around half of which is already under construction across 20 major office schemes, including eight new towers.

Major applications approved this year include RSHP’s 99 Bishopsgate, Wilkinson Eyre’s 130 Fenchurch Street, Fletcher Priest’s 63 St Mary Axe and KPF’s 70 Gracechurch Street.

Tom Sleigh, chairman of the City’s planning and transportation committee, said the City was “once again showing the rest of the country how to plan for growth”.

“These are not just buildings but commitments to Britain’s economic future. Our planning pipeline is powering the City’s evolution into a more sustainable, better connected, and more vibrant destination for businesses, workers and visitors alike,” he added.

The City is also set to adopt a new Local Plan in the first half of next year which will set a blueprint for future growth in the district alongside new guidance on sustainability and carbon reduction.