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London office demand drives commercial construction revival

25 Sep 15 The value of commercial & retail construction contracts awarded in August reached £1.5bn, its highest level for more than four years, according to one analysis.

Almacanter's Marble Arch Tower project is among August's new contracts
Almacanter's Marble Arch Tower project is among August's new contracts

The latest Economic & Construction Market Review from Barbour ABI reports that it was a busy August for the commercial & retail sector, with office construction dominating the sector with 84% of the total value of contracts awarded during the month.

Each of the last three months have seen commercial & retail construction contracts total more than double the value when compared to that in May. August’s total was also up more than 70% on August 2014.

Eight of the top 10 biggest projects were in London, which accounted for 60% of the total amount of commercial & retail contract awards in August. These include the £150m Park Place development in Canary Wharf and the £100m Marble Arch project in Westminster.

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Barbour ABI economist Michael Dall said: “After an unstable start to the year, commercial & retail construction has picked up dramatically to the point where August has been the strongest month for more than four years.

“It’s not surprising to see London dominating the sector once again. As a global city, we’re seeing more and more demand for office space in the capital, hence the massive projects awarded contracts this month. Even with the recent spike in office construction work being put on hold, this isn’t putting off investors rolling the dice with new projects looking towards the future and the potential gains to be made from London property.”

“Over the last three months and in particular August, demonstrates that there is a major demand for office space and willingness from investors to spend and commit to new projects. The long term growth for this sector is looking positive, and when commercial & retail is strong it can often be a sign that the economy as a whole is performing well.”

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