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New building: outwards not upwards?

14th August 2014

New building: outwards not upwards?

As London’s construction continues in line with the property market confidence in the capital, supply is yet to satisfy demand in part as a result of the economic crash that put many projects and plans on hold. 

The surge in planning applications – albeit many are amended from their original pre-2008 format, often now favouring residential space or fewer floors – has led to the familiar sight of cranes, signage, barricades and scaffolding in the city. With London’s expansion into areas not previously used much for offices, such as Shoreditch, and infrastructure bringing the outskirts-areas closer to the city, such as Crossrail, every square foot of the city is being – or going to be – used. Of course, the squeeze on space is one reason for the soaring per-square-foot prices seen in London in recent times, and the space issue is compounded by the need for councils to ensure open, public spaces when granting permission for new developments. Designers and architects are having to prove themselves smarter and cleverer than ever before in fitting green space around (or even on top of) new buildings. 

This begs the question, of course, as to why there is an insistence on building in London. More offices and businesses, more influx from overseas companies, and more construction all mean a greater need for infrastructure and residential space – leading to even more construction. 

As we have recently reported, many companies are looking further afield for their offices, within a reasonable commute into London – or even further, 70 or so miles away in some cases, to areas offering an entirely different environment and much cheaper prices. It is in these such areas, as well as the larger cities, such as Liverpool, Manchester, Birmingham, Glasgow, Leeds, that construction is easier and cheaper. Often, there is less red tape, fewer conservation area restrictions to deal with, and in practical terms, it can be easier to simply build the building you want because it’s not hemmed in by other buildings, be they new or old. 

Many of these former industrial cities have former industrial sites that have been out of use for a long time and that can relatively easily be built upon, with the space for free parking for their staff or with the ability to link easily to local transport connections. Construction costs may be lower, in part because of the lower cost of living in areas outside London as well as the lower cost of land. 

Some companies are already making this choice, and it’s one that many others may follow. 

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.

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