New City buildings planned as investors bet on post-pandemic return to London offices

In total the corporation has approved some 1.2 million square feet of office space, new or revamped, within new developments so far in 2021. That compares to around 2.6 million square feet for the whole of last year.

The latest scheme was approved by the corporation yesterday and is for Hong Kong-based developer Tenacity to create around 775,000 square feet of flexible office space as well as shops.

The 70 Gracechurch Street project will also feature a new direct pedestrian link to the historic Leadenhall Market, more than 1,000 cycle parking spaces, and a public gallery and garden at levels 29 and 30 which will offer views across the capital.

Patrick Wong, chief executive of Tenacity, which is also planning another office-led development nearby, said: “We believe that high quality office space with the latest sustainability standards and technological innovations will remain in demand post pandemic.”

Toby Courtauld, chief executive of developer Great Portland Estates, which has recently committed to a major office refurbishment at 50 Finsbury Square, said: “As the country begins to emerge from the national lockdowns, we are seeing substantial demand for new, highly sustainable, grade A quality space from businesses that recognise London’s ongoing importance as a global business capital.”

He added: “For some time, we’ve been expecting a shortage of this space and have already committed to our exemplar project at 50 Finsbury Square to take advantage of this anticipated scarcity. Beyond that, we have a further 700,000 sq ft in our near term development pipeline, delivering on the needs of tomorrow’s occupiers.”

The London office leasing market had a very difficult 2020 as a number of bosses froze property decisions as they tried to ride out the virus crisis. Tough conditions are expected to continue, as it is expected many firms will look to embrace more flexible work in the future, with a mix of home and office hours.

That could impact how much space firms need. But, investors think there will be good demand for some of the newest and most attractive offices, of which there will be limited supply.

Philip Pearce, head of central London leasing at Savills, said: “Most occupiers will gravitate to the best stock post pandemic, and so developers are looking to deliver schemes to take advantage of anticipated supply shortage in 2025 onwards."