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12th December 2022
Tougher economic times and pressure on public spending are inevitably taking their toll on the overall level of new construction orders. But activity on major construction projects - worth over £100 million - remains healthy as work gets underway on numerous large new developments, particularly in the industrial and commercial sectors.
The recent November Glenigan Construction Review shows that while overall project starts were flat in the three months to October, the value of major project starts in the period stood 28% up on the previous three months and 19% up on the period a year earlier.
Healthier industrial pipeline
More significantly, the new work pipeline for major projects is looking healthier. Detailed planning approvals for major projects virtually doubled in the three months to October and were up by 126% on the period a year earlier.
The green light for more significant industrial and logistics developments is one key driver of the upturn in major projects approvals. Detailed planning approvals granted on major industrial projects were worth £1,914 million in the three months to October, almost double the level of the previous three months and an almost five-fold increase on the period a year ago.
Glenigan data highlights various major industrial projects where construction work is set to get underway. In Middlesborough, for example, detailed plans have been granted for Tees Valley Lithium to build a £200 million manufacturing plant at the Wilton International Site, where work is due to start next March and continue for eight months (Project ID: 22138567).
Moving south to Castleford in West Yorkshire, Axiom Yorkshire is set to submit a planning application for a £153.3 million employment and logistics development which will involve almost 1.5 million sq ft of space and 13 industrial units of various sizes. Work on the project is set to start in spring 2024 and run for 12 months (Project ID: 22351016).
Meanwhile in south east London, tenders have recently been returned on a major £106.9 million multi-storey industrial development for GLA Land and Property at Bugsby’s Way. Work on the project, which includes access roads, is set to start next summer and could run for 85 months (Project ID: 22370824).
Significant office developments
A surge in major new office developments is also creating some significant new opportunities for construction work. Major office project starts (worth over £100 million) were worth £1,271 million over August-October, a five-fold increase on the previous three months and nearly three times the level in the period a year ago.
Meanwhile, contract awards for major office projects – up more than six-fold on the period last year – also showed a healthy improvement.
Glenigan data shows how large office schemes in London have featured heavily amongst the upturn in major projects in the sector. At 55 Gracechurch Street in the City, detailed plans have been granted and work is due to start next spring on a new £180 million office tower for the City of London Corporation with 29 upper storeys involving 34,000 sq m of space (Project ID: 20246778).
Meanwhile, Lendlease has recently been appointed as the preferred bidder on Great Portland Estate’s huge £130 million new office scheme at 2 Aldermanbury Square in the City, where work is due to start next spring (Project ID: 21166709).
Beyond the capital, major office projects set to get underway include Peel Media’s £140 million development at MediaCity Plot C3 at Salford in Manchester. Tenders have been returned on the 11-storey scheme which involves almost 30,000 sq m of space and where work is set to start early in the new year and run for 37 months (Project ID: 22261646).
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