Office construction contracts up 40% from 2023

Office construction contracts worth £2.1bn were awarded in the three months to April 2024, up 40% from the same period in 2023.

This total, according to data from Glenigan, is up 61% from the previous three months and driven by work on major projects worth £100m or more.

Work on projects of this size totalled £1.4bn during the reporting period, a 214% increase from the preceding three months and 401% up from 2023.

This recovery in office construction was not restricted to the biggest projects.

Construction starts on office sites valued between £50m and £100m rose 12% from the previous quarter.

Meanwhile, projects valued between £20m and £50m recorded the biggest rise.

A total of £412m worth of office projects of this size were started in this period, up 127% from 2023.

Momentum is now gaining in the office construction sector with more schemes gaining planning permission.

In the three months to April 2024, £2.6bn worth of office construction projects gained planning approval - up 26% from the same period in 2023.

More activity is likely to happen for schemes valued under £100m where there has been a 25% rise in planning approvals compared to the same period in 2023.

At the same time, there was a 22% fall for projects valued at £100m or more over the same period. 

Based on these figures, Glenigan is forecasting underlying starts to rise by 13% in 2025 with £5.3bn of work to be carried out. 

Allan Wilén, economics director at Glenigan, said: “Changing work patterns will remain an important driver for the sector, supporting a gradual recovery in starts over the next two years as landlords and occupiers refurbish and redevelop premises.”

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