London office starts spell trouble for non-prime space

The latest Crane Survey reported that a record high 16.4m sq. ft. of London office space was under construction in Q1. That in part reflects developers delaying projects until the demand outlook becomes more certain. But a decent level of new starts also highlights how robust demand for prime space with strong ESG credentials is supporting development. However, that extra supply will only worsen the outlook for secondary offices, a growing number of which risk becoming obsolete.