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24th August 2018
Construction market research by Glenigan shows that the value of construction contracts awarded by local authorities in London is falling.
Glenigan’s latest market analysis shows that the value of construction contracts let by the 32 London boroughs and the City of London fell by 11% in the 12 months to July 2018.
The total value of spending in the most recent period was £1,562 million compared to £1,754 million in the preceding 12 months.
The London Borough of Tower Hamlet’s £105 million civic centre project is the single largest scheme with a construction contract awarded in the last 12 months. Glenigan’s construction market research shows that Bouygues UK will build this scheme, but Tower Hamlets is not the biggest spending local authority in the capital.
Joint venture projects drive workload
The London borough commissioning the biggest amount of construction projects recently is Camden.
Camden’s share of construction orders placed in the last year is £160.4 million. This spending has been driven by a number of joint ventures formed by the council with private sector partners.
Camden has teamed up with Lazari Properties for the £50 million Stephenson House scheme at Euston. Glenigan’s market analysis shows that 8Build has won the contract to build this 23,000 sq m mixed use development. Camden is also working with British Land on the £73 million One Triton Square commercial development being built by Lendlease.
Other London boroughs are following suit.
The London Borough of Hackney has teamed up with Hackney Property Holdings for a £20 million project to build 83 flats and an office at Hackney Road. Tolent is building this scheme according to Glenigan’s research.
In Islington, the local council is working with Deepdale Investment and Newmark Property on the £20 million Fitzpatrick Building featuring offices and being built by Volker Fitzpatrick.
The Dutch-owned contractor is also building the £90 million Meridian Water rail station project, which the London Borough of Enfield is working on with Network Rail.
Councils team up with residential developers
London boroughs are also working with residential developers rather than selling them land outright.
Ealing Council is working with developer St George on the £100 million Filmworks residential scheme, while the London Borough of Havering has formed a joint venture with Wates for a programme of estate regeneration, which could eventually top £1 billion.
GLA spending down and capital forecast poor
Construction awards by the Greater London Authority also fell by 14% in the 12 months to Q2 2018 to £432 million from £504.6 million a year earlier.
Overall construction spending by the GLA and the capital’s 33 local authorities was £1,993 million, which is down by from £2,253 million in the preceding year.
Glenigan’s construction industry analysis also shows that the underlying value of construction projects receiving planning approval in the capital fell by 6%. This includes public and private sector work and is why Glenigan is forecasting a significant fall in the underlying value of construction projects starting on site in London during 2018.
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