Available office space in London will dry up by 2012 as a result of the suspension of construction projects, it has been predicted.
A new study conducted by King Sturge found that the credit crunch has caused 4.3 million square feet of new space that was due to be developed between 2009 and 2012 has been scrapped.
One consequence of this will be that by the time that the economy recovers there will be no space to fulfil demand from companies.
In turn, the supply shortfall will send prices for the office space that is available spiralling, City AM reports.
Mark Bourne, a partner at King Sturge City, commented: “Developers are obviously considering such factors as funding, increasing costs, environmental legislation and empty business rates, all of which will enable levels of City supply to recover.”
Among the London office developments that have fallen foul of the economic slowdown are high profile, large scale constructions which were to have been overseen by Land Securities and British Land.