East of England bucks national trend with double digit growth

One regional market which has remained buoyant in recent months is the East of England. The latest Glenigan index shows that whilst most UK regions saw a fall in project starts in the three months to August, the value of starts in the East of England was up by 24% up on the period a year ago. Much of the region benefits from being within commuting distance of London - which has acted as a spur to new housing activity - whilst the thriving hi-tech business parks around Cambridge have seen significant growth. One landmark site is AstraZenaca’s new £330 million R &D centre and global HQ on the Cambridge Biomedical Campus which Skanska topped out earlier this year and where occupation will start in 2018. Overall, Glenigan figures show that the value of underlying starts in the East so far in 2017 up to August stood 14% up on the period last year with marked rises in the level of starts in private housing, up 58%, retail, health, education and utilities. Developers are particularly optimistic on prospects in the area between Cambridge and Oxford. A recent report from Bidwells, a property consultancy, pointed to strong demand and sharp rises in rents for office and laboratory space in what it describes as the ‘golden triangle’ between London, Cambridge and Oxford. Rents for prime quality office space in Oxford have risen to £30 per sq ft (up 13.2% over the past 12 months) whilst Cambridge rents are up by 4.1% to £38 per sq ft. Overall, it estimates the demand for office space in Cambridge/Oxford/Milton Keynes at 2.6m sq ft, compared with a supply of 2m sq ft; a promising background for new development. The sharp rise in industrial activity in the East earlier this year, where Glenigan figures show a 42% rise in the value of underlying starts in the five months to May, has reflected growing demand for warehouse and logistics space, particularly along the A14 linking the Port of Felixstowe to the Midlands. In October, Ipswich-based Jackson Civils will start work on the main part of £3 million of infrastructure contracts at the 114-acre Suffolk Park scheme near Bury St Edmunds, close to the A14 where two major distribution sheds totalling 350,000 sq ft are being speculatively developed. Other major warehouse schemes are underway in the region at Gateway Peterborough, close to the A1(M) and Alconbury Enterprise Campus. Some major infrastructure projects are also keeping contractors busy in the East. Work on the £1.5 billion upgrade of the A14 over 21 miles between Cambridge and Huntingdon – the biggest road project currently underway in the UK - started last November, with a Costain/Skanska jv delivering the first package. The offshore wind farm sector off Gt Yarmouth is also emerging as promising source of work. In August, ScottishPower Renewables received planning approval for the East Anglia THREE offshore windfarm to be built off the Norfolk coast which will involve up to 172 wind turbines. Along with other offshore schemes, this has provided a boost to development onshore, notably at the ports of Lowestoft - which will be the operations base for the East Anglia ONE wind farm - and Gt. Yarmouth, the construction and installations base. Morgan Sindall has also recently started recently work on a new £7.7 million hq in Gt Yarmouth for offshore firm Proserv in a development where the borough council and local LEP is also investing.