Commercial property market shifts to refurbs

The commercial property market is currently seeing more activity in the refurbishment area of the market than in new builds.

According to the latest Drivers Jonas Deloitte Crane Survey, six out of the last nine major construction starts in London were refurb projects. Across the capital as a whole, around one in four big schemes are now refurb jobs.

While refurb projects are finding more strength, there have only been 25 new starts since the Spring survey. This compares to the 34 recorded six months ago.

The decline in new spaces could have a knock-on effect on commercial property prices in the coming months.

Anthony Duggan, partner and head of research with the group, commented: "At a market level, the City has seen a further increase in construction while a number development completions and a lower level of new starts have led to activity falling in the West End.

"Developers have been encouraged by increased letting activity among the schemes under construction with several schemes having achieved early-letting success over the last six months."

The findings suggest that there is still interest in the market, with construction levels continuing to show gradual increases. However, the focus of the industry is starting to shift and a lack of confidence could be preventing investment in bigger projects.

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