City of London office space demand continues to rise

A skyscraper, 55 Bishopsgate, is planned, shown in a mocked-up image to the left of the dark, shorter Tower 42, also known as the NatWest tower

Demand for office space is continuing to rise in the City of London despite the post-pandemic shift to working from home.

There was a 5% rise in City jobs between 2021-22, taking the workforce to 615,000.

The latest figures show planning applications are up a quarter on last year.

The impact of working three or four days in the office has been blunted partly by the 5% workforce increase.

The City of London Corporation said there were positive signs amid continuing cost-of-living uncertainty.

There were 1,023 planning applications to the corporation up to September this year, compared to 820 in the same period last year.

More than 500,000sq m of office space is in the planning pipeline alongside a similar amount already being constructed.

The corporation released computer-generated images to show 11 new buildings and how the skyline in the Square Mile is set to change by 2030.

Proposals for 85 Gracechurch Street would see a mixed-use office tower built in the City

Finance still dominates but there was a 27% increase in tech firms. Legal and insurance companies had led the way back to office use with a focus on in-person training and mentoring.

Shravan Joshi, chairman of the City of London's planning and transport committee, said the City was at a "tipping point" where new jobs, businesses and industries were "balancing out" work from home.

He said: "We have a young population, over a half of our workforce being under 30 and many of them international workers. That, alongside the insurance and legal sectors in particular, is driving the return to the workplace."

He added that attempts to "reinvent Fridays" and "reactivate weekends" with a focus on cultural attractions like the Barbican and food-and-drink offers at restaurants had led to footfall higher than before Covid.

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Some corporate giants like HSBC and Clifford Chance recently said they were shifting their headquarters to the City from Canary Wharf.

But Mr Joshi dismissed the notion of fierce competition between the two areas, with Canary Wharf focusing more on life sciences and residential development.

"We've got to get away from this narrative. We are both grown-up enough to recognise that if one of us sneezes the other catches a cold."

Greater take-up of office space signals better news for thousands of small businesses. James Hennebry, owner of Rosslyn which has three coffee shops in the City, said his firm was doing better than ever.

He said: "Yes, I would say that rumours of the death of the City of London are greatly exaggerated! We are positive about the future and are actively seeking new sites within the Square Mile."