The GLA published the London Office Policy Review this week - LOPR 2012. It's the latest in a research series that stretches back over 20 years and includes data/forecasts spanning more than 40 years, between 1990 and 2031. Sandra Jones of Ramidus Consulting which worked on the report highlights some of the key findings.
"LOPR 2012 comes a pivotal time for the London office market. Even before the recession, thirty years of rapid expansion in the office economy was reaching a natural end. Office employment in London is forecast to grow at half the rate of the past two decades. Thus, there is little need for expansion of the office market beyond what is already in the pipeline.
But LOPR highlights other dynamics that will drive demand for new formats of office and related employment space, including: changing workstyles; technological innovation; infrastructure investment; loss of office stock to other uses and London's role in the global economy.
The big question for LOPR is whether the London Plan enables the development industry to deliver 'the right space, in the right place, at the right time, at a manageable cost to occupiers'.
The 2012 performance benchmarks are reassuring. They suggest that this market has learned to moderate the flow of supply in line with the scale of demand. But LOPR flags up a concern over the quantum of second-generation mega-schemes planned or under construction. These could deliver 3.74m sq m - a 13% addition to stock and 54% more than the seven first generation mega-schemes built between 1984 and 2008.
A new London geography has emerged, with mega-schemes (effectively mini-CBDs) on its periphery and at transport nodes creating a polycentric city. Crossrail will exert strong gravitational pull along an east-west axis.
Outer London's already weak office markets, especially those to the north and south, will need to explore alternative uses for vacant offices. East London is understandably the focus of policy intervention but LOPR cautions against complacency about west London, which is under threat from the loss of TMT employers and questions over Heathrow's future.
This process of change is not new, the ability to adapt has been key to London's long history of success and London 2012 is already a very different place from London 1990.
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