While other indicators suggest that the UK construction industry is hovering on the brink of a downturn, an old-fashioned headcount of tower cranes suggests we’re booming.
According to Deloitte’s latest crane surveys, construction activity has hit record levels.
The Deloitte Real Estate Crane Survey series monitors construction activity in Belfast, Birmingham, Leeds and Manchester as well as Dublin. It suggests that in 2018 each city saw a sustained or increased level of development across a whole range of sectors including offices, apartment blocks, hotels, shops, schools and student housing.
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.”
Belfast
Belfast had 34 schemes under construction in the city centre last year – with 21 schemes completed in 2018 and nine set for completion this year. It has been a healthy year for office development as work began on over 400,000 sq ft of new Grade A space, which the survey notes as making good progress against the Belfast Agenda target of 1.5 million sq ft of new space by 2021.
Birmingham
Birmingham saw 23 new starts in 2018, including 13 residential schemes, bringing the development pipeline to more than 5,000 units under construction. Last year also saw the delivery of the most residential units to the city centre, the highest since the Birmingham crane surveys started in 2002. New office development is down from a peak of seven new starts in 2016, to just two new schemes today. However, 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, Deloitte reckons.
Leeds
Leeds has recorded the highest level of construction in the city centre since the Leeds crane survey began in 2002, with 21 new construction starts in 2018. This includes seven new office schemes adding to the record 844,986 sq ft office development pipeline. Residential development continued an upward trajectory with three new 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 schemes, which will be the city’s first purpose built bild-to-rent units.
Manchester
In Manchester the residential sector is driving record levels of development activity. 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, which was the highest level in 12 years and Manchester’s development pipeline suggests 2020 will see the addition of the most homes in nearly 20 years. Manchester’s office sector has more than two million sq ft of office space under construction across 13 schemes; a notable increase on the consistent levels of 1.5 million sq ft reported between 2015 and 2017. A quarter of the office developments in 2018 were pre-let.
Simon Bedford said: “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. Investor confidence is thriving, as the rise in office pre-let deals clearly demonstrates. With creative, media and tech occupiers leading some of the major office deals in 2018, twinned with growing diversity in talent, these are good foundations for regional growth in the years to come.”
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.”
Sourced from: https://www.theconstructionindex.co.uk/news/view/cranes-fill-the-skyline-in-booming-regional-cities