Developers told to build in London now

The continued reluctance of developers to build speculatively means virtually no new space coming on stream in central London beyond the end of this year.

The latest Crane Survey by property agents Drivers Jonas has found that the amount of space under construction in the heart of the capital is 33% down at 7.1m sq ft compared with the more active situation in October 2003, six months ago.

There are still no construction starts in Paddington or Canary Wharf.

Matthew Elliott, partner at Drivers Jonas, said: "There has been a sea change in sentiment. Tenants are out looking for space and even developers are starting to feel chirpy. With few new schemes coming on stream this year, there is a clear opportunity in 2006. To benefit, developers need to start building this year."