星空传媒

It may be only one floor of a building, but the significance is considerable. Work will start next week on the 34th level of the Swiss Re building, the so-called Gherkin (pictured left) 鈥� which, since it was completed last year, has been just as notable for being two-thirds empty as for its dramatic impact on London鈥檚 skyline. The empty floor space was an ever-present sign that the much-hoped for return of the capital鈥檚 office market, which has been in a slump for most of the decade, had yet to come. The fact that some of the space is finally being taken comes as more optimism and, more importantly, activity is present in a sector that has suffered a downturn for most of the decade. Which hopefully means work that has been frozen on the drawing board for QSs and project managers will finally transfer to site.

This welcome upturn in fortunes has led to developers pushing a raft of new speculative office schemes. QSs ranging from Gardiner & Theobald to AYH and Cyril Sweett Ryder Hunt are tendering out major office schemes across the city (see Key London jobs, below).

On the move

Without doubt, this positive attitude is sweeping through the whole industry. 鈥淧eople are a bit more confident,鈥� says one contractor tendering for several of the 10 or so major new projects. He adds that there appears to be a consensus that developers want new products on the market by the end of 2007, hence the need to get plans up on site. Equally significantly, projects where contractors had already been selected some months ago 鈥� such as Land Securities鈥� New Street Square project on London鈥檚 Fetter Lane 鈥� are finally moving to the construction phase. And such is the buoyant mood at the moment, there is even talk in the market that some of the hugely ambitious tall towers planned for the capital, including the Heron Tower by developer Gerald Ronson, may finally go ahead. No wonder the sector is feeling a lot more enthusiastic about the future.

Recovery position

The latest industry research seems to back this up. Property surveyor and agent CB Richard Ellis鈥� survey of the central London market in the first quarter of 2005, released last week, found that the volume of office space under construction rose to nearly 5m square feet. This is the first substantial increase in construction activity since 2000 and 鈥渟uggests a growing willingness to initiate development schemes in the early stages of the recovery phase鈥�. The survey also believes there is at last a change in sentiment among developers in the City: 鈥渢here are indications of a growing willingness on the part of developers to activate consented or proposed schemes for delivery late in the decade鈥�.

There are other significant green shoots of recovery in the office market for QSs and project managers, as well as the eye-catching shiny new blocks appearing out of the ground. James Dickson, a director at Northcroft, has seen more demand for so-called churn work, where occupiers need quick fit-out work for individual floors, in the last two months or so. This comes a year after the fit-out market nearly ground to a halt, leading to the collapse of contractors such as Spectrum and Benson. Dickson also points to the continued strength of the market in London鈥檚 West End. 鈥淚t鈥檚 still quite vibrant,鈥� he points out.

Another sign that things are moving in the right direction is the serviced office market. London firm Matrix is working on two such schemes for client MWB Business Exchange, one in Cannon Street, Central London, and another in Birmingham. Managing director David Clark sees such work as indicating further demand 鈥� which, in time, can only lead to a regeneration. He sums up a more positive feeling among those in the market. 鈥淭here has not been much going on for three or four years, probably even longer than that. Luckily there is a sense of things happening now.鈥�