Construction sector monitor reveals growth in development of new office schemes

The total value of new office schemes granted planning permission doubled on the previous year in the first three months of 2023, construction sector monitor Glenigan has revealed.

Rising numbers of approved schemes, totalling £3.5 billion in the first quarter of 2023, has also seen construction activity boosted as work on those commercial schemes gets underway, with further growth for construction anticipated as the volume of work in the pipeline continues to rise. Approvals for office schemes is also up 69% on the last quarter of 2022, according to the &P Global/CIPS UK Construction Purchasing Managers’ Index, and Glenigan’s own planning data.

While the lasting effects of the Covid-19 pandemic and shift to greater home working has seen commercial property values slump, this fall is now slowing as new ways of working become more established.

Glenigan’s data is now finding developers are looking to move forward with schemes as the market shows signs of bottoming out. Although London continues to lead the way in commercial real estate, the North-west has also seen £301 million of office schemes gain planning approval, most notably Manchester’s £167.9 million Central Retail Park scheme.

Smaller schemes have also begun to see a boost in progress. Planning approval for projects below £100 million in value have also increased 35% on the final quarter of 2022, and are up 67% on the same time last year.