Life sciences and tech lead in strong demand for new office developments

The April 2022 Glenigan Construction Review has revealed that project starts on new office developments rose sharply in the first three months of the year, buoyed by strong demand from the tech and life sciences sectors.

Data from the construction sector gathered by Glenigan revealed that project starts for commercial office schemes rose 28% in Q1 of 2022 compared with the previous year, with projects in London, the North-west and East Midlands leading the charge. Demand was closely linked with sectors of the economy currently performing best, including life sciences and fintech, which are showing strong demand for spaces between 500 and 1,000 sq m.

Construction on large developments worth over £100 million more than doubled in value to £686 million compared to January to March 2021, while smaller office schemes between £20 million and 50 million rose by 87% to £581 million.

While office developments in London represented the lion’s share of new project starts in the UK, valued at £1,263 million in the first three months of 2022, the North-west also saw significant growth. Schemes worth £211 million saw approval in the region in January to March 2022, an increase of more than one-fifth compared to the same period last year. 

Locally, Bruntwood SciTech, developers behind the life sciences and tech hub at Alderley Park, revealed plans in February to see a further 200,000 sq ft of lab and office space added to the former AstraZeneca site. Plans for a mixed commercial and residential future for the former M&S store in Macclesfield town centre were also revealed in the first quarter of 2022.

Market analysis by Glenigan mirrors the findings of the RICS, which saw a significant uplift in demand for new office space in their latest commercial property market survey.