Regional construction work hits record levels
Regional construction work has hit record levels amid strong confidence among developers, according to the latest Deloitte Real Estate Crane Survey.
The survey monitors construction activity in Belfast, Birmingham, Leeds, Manchester and Dublin.
It found a sustained or increased level of development across a range of sectors, particularly residential.
By city, the survey found:
- Belfast: 34 schemes under construction in the city centre, with 21 schemes completed in 2018 and nine set for completion this year. Work began on over 400,000 sq ft of new Grade A office space in 2018, against the Belfast Agenda target of 1.5 million sq ft of new space by 2021.
- Birmingham: 23 new starts. Thirteen new residential schemes commenced, bringing the development pipeline to over 5,000 units under construction. New office development is down from a peak of seven new starts in 2016, to just two new schemes today. Total office volume under construction remains high at 1.4 million sq ft and 2019 is set to be a record-breaking year for office completions.
- Leeds: The highest level of construction in the city centre since the Leeds crane survey began in 2002, with 21 new construction starts in 2018 including seven new office schemes. Three new residential starts, set to deliver a further 533 units to the city, bringing the total to 2,119 units currently under construction. Five of the developments under construction are ‘Build-to-Rent’, which will be the city’s first purpose built Build-to-Rent units.
- Manchester: Record levels of development activity, driven by residential. A total of 14,480 residential units are under construction - double that of two years ago. Last year, 2,569 units were delivered to market - the highest level in 12 years and Manchester’s development pipeline suggests 2020 as delivering the most homes in nearly 20 years. Manchester’s office sector has over two million sq ft of office space under construction across 13 schemes, up from the consistent levels of 1.5 million sq ft reported between 2015 and 2017.
Commenting on the surveys’ findings, Simon Bedford, partner and regional head at Deloitte Real Estate, said: “To have construction figures this healthy is somewhat of a surprise given a myriad of market uncertainties. Developer confidence is a key indicator for economic health and to have this many significant construction starts over the last 12 months, especially in speculative office schemes, is testament to the resilience of the regions and appetite for growth.”
“If Manchester had featured in the recently published North American Crane Index, it would have ranked number two - behind Toronto but in front of Seattle, Los Angeles and Chicago. That might have seemed like a remarkable stat a few years ago given Manchester only had one crane in the sky in 2011, but today the figure is a massive 78 sites under construction.
“The marked increase in office construction levels is reflective of the continued draw to all these regional cities for major businesses.”
Looking ahead, he concluded: “Despite record levels now, challenges may arise as we enter the 2020s. Each of our featured cities have ambitious plans which, if they are to emerge, will need to be supported by investment in essential infrastructure which is currently struggling to keep up with the pace of real estate development. The next decade may well be all about transport and smarter city solutions.”
Article & Image Source: Construction Manager