THE LATEST London Crane Survey by Deloitte says that office construction is down 5% over the last six months.

With the slowdown on new office starts in the capital, there is currently the lowest level of available space for six months.

Rising tenant demand is likely to lead to a squeeze on the cost of office space with rents likely to rise over the net five years, the report says. But a rise in demolition activity suggests a new wave of construction could begin soon.

Anthony Duggan, Head of Research, Deloitte Real Estate, commented:

“It’s difficult to see how we will avoid a squeeze on supply across central London, and over the next 12 to 18 months, the lack of choice for some occupiers is likely to drive more pre-letting activity.

“But our analysis of the longer-term outlook for supply suggests 2017 and 2018 could be the years in which delivery really starts to recover, as the current wave of demolitions begins to translate into completed schemes.”

Deloitte’s field research across central London has identified only the West End and “Midtown” as being home to rising levels of office space construction in the six months leading up to March 31st.