Confidence in commercial property development underway

Permalink: Confidence in commercial property development underway
by Lin Freestone

Despite the evidence that commercial property transactions in the first half of 2008 have fallen by almost 50%, optimistic developers are continuing to work on construction projects already underway.

Property consultancy Atisreal’s research shows that, although there is speculative development due for completion this year and in 2009, very little is projected for 2010.

The long-term cycle of commercial property development and the expectation that the economic climate will be back on track in two or three years’ time, is convincing developers with contracts and finance already in place to carry on as planned.

Although there is currently five million square feet of empty space in the City of London and a sharp fall-back in rents, Heron International is on track to complete its Heron Tower on London’s Bishopsgate by the first quarter of 2011. Heron Tower is a multi-occupied building which will provide world class office space,

A consortium of Qatari investors is working with Sellar Properties to build the £2bn Shard of Glass in London. The 310m tower, officially known as London Bridge Tower, is expected to be completed in 2012 and will add two million square feet of space in London’s financial district.

Transport for London will be the anchor tenant, contracted to occupy 190,000 square feet of office accommodation, and Shangri-La Hotels is taking almost 200,000 square feet of space.

The Qatari investment underpins the confidence of the consortium in the London commercial real estate market, and its faith in the mixed-use project that will become Europe’s most recognisable commercial property landmark.

Construction is expected to begin shortly at The Pinnacle, also known as the Helter Skelter, in Bishopsgate, London. This was acquired by Arab Investments in February 2007, and is due to be finished in 2012.