Demand for office space in London’s Square Mile financial district is booming, according to the City of London Corporation.
The corporation is currently negotiating planning permissions for 500,000 square feet of office space, the equivalent of about 70 football pitches in size, with another 500,000 square feet already approved and under construction.
The demand is being driven by a 5 per cent rise in the number of city workers in the past two years to 617,000.
The corporation predicts a further 85,000 people will be working in London’s Square Mile by 2040.
This increase will require a further 1.2 million square metres of office space, according to a recent report by Arup and Knight Frank, which was commissioned by the City Corporation.
There has already been a 25 per cent increase in planning applications received and decided upon so far this year, with most of the proposed taller buildings centred in the “City Cluster” area in the Square Mile‘s eastern corner, already home to some of London’s most famous high-rises.
The corporation received 1,023 planning applications up to September this year, compared with 820 in the same period in 2022.
‘City Plan 2040’
It’s all part of the City of London Corporation’s “City Plan 2040″, which sets out the corporation’s vision, strategy and objectives for planning up to 2040, together with policies aimed at guiding decisions on planning applications.
The plan is not all about new high-rises – it also provides for retail and food outlets, as well as green spaces and areas of historic and cultural interest.
“Through our flagship ‘Destination City’ policy, we are creating a culturally vibrant, inclusive and welcoming city, enabled in part by these tall towers, which help accommodate the hospitality, leisure, social and cultural destinations that are flocking to the city,” said Shravan Joshi, the chairman of the planning and transport committee at the City of London Corporation.
“The City Corporation’s strong performance this year is underpinned by the Built Environment team’s efforts to de-risk many of the variables associated with real estate investment.
“This includes providing clear policy directives, working closely with stakeholders and undertaking transparent consultation on schemes.”
Nonetheless, data from Rightmove and property analytics company EG earlier this year showed that the number of inquiries for new working space in London between January and April this year dropped by 11 per cent, compared with 2022. But the figure was only 1 per cent below that in the same period in 2019.
“Whilst London inquiries are down, it really is only by a small amount considering the change in office occupancy levels,” said Anna Reed, data director at EG.
“What has changed, however, is the type of space occupiers want – high spec, sustainable with flexible terms and shorter leases, as well as shifting to smaller floor plates.”
Earlier this year, HSBC became the most high-profile tenant of Canary Wharf to announce that it was quitting the Docklands area of London to return to the City, albeit on a smaller scale.
The move was seen as a reaction to the increase in post-coronavirus hybrid working patterns, where employees spend some time working from home.
At the time, HSBC cited one reason for the move was that the City was “a more convenient location for employees”, despite the fact that Canary Wharf is connected to the new Elizabeth train line.
The current London skyline and how it will look by 2030
Updated: November 02, 2023, 9:54 AM