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23rd April 2018
The slowdown in the London construction market since the EU Referendum has been well-documented, particularly in the office and high-end residential sectors. However, there has been promising news on major construction projects on mixed-use and mid-market residential schemes and from the rail sectors which bodes well for top UK contractors. Together, they should help breathe life into the capital’s construction sales pipeline from next year.
After a 6% fall in the overall value of construction starts in London in 2017 (and a 24% fall in office starts), Glenigan Construction market analysis is forecasting a continuing fall in starts this year. But it also points to recovery in the capital next year, beginning with a 20% rise in construction starts in the first quarter.
In the residential sector, the huge £9 billion redevelopment of Battersea Power Station has recently reached a milestone with the completion of the first phase of 865 homes. But some significant building projects remain on the scheme which will eventually involve some 4,000 homes as well as shops, restaurants and offices across the 42-acre site.
Development on the horizon
Other significant developments are on the horizon which will benefit building contractors in the residential sector in the capital. Work is set to start towards the end of this year on a major regeneration scheme at Clapham Junction which Taylor Wimpey has acquired in a jv with Wandsworth BC which will involve over 2,200 homes. As part of the Mount Pleasant estate, near King’s Cross, Taylor Woodrow has also acquired around 680 plots from the Royal Mail.
Glenigan Construction market analysis points to other significant schemes in the construction sales pipeline. Detailed plans have been submitted for VCI Property Holdings’ £14.3 million mixed-use scheme of 257 flats at Vauxhall Cross Island (Glenigan project ID 10339579), where construction works are set to start at the end of this year. Elsewhere, construction tenders have recently been returned for a £28 million scheme of 115 flats and a conference hall at Maitland Park Villas for the London Borough of Camden. Construction works are set to start this July (Glenigan project ID 14353018).
Meanwhile, in rail, the £4 billion redevelopment of Euston Station has moved closer with the appointment of Lendlease as the master development partner on the site. The station is set to become the new terminal for HS2 with building projects involving some 1,700 homes. Working alongside Network Rail, the scheme should produce a significant volume of other construction projects in the area as it unlocks long-term development covering some 4.84 million sq ft of space.
Other rail-related projects should help provide tender opportunities in London in the medium term. A huge £136 million TfL project to upgrade and expand Camden Town tube station, is currently at the pre-tender contract stage and is set to start in 2021 with construction works set to run for 55 months.
Meanwhile, top UK construction companies will be interested in a request from transport secretary Chris Grayling to come forward with ideas to build a new southern rail link from Waterloo Station to Heathrow Airport. A number of consortia are said to be looking at the construction projects which could cost £1.6 billion and would be over and above the £47 billion the government is already planning to invest in rail over the next 5 years.
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