Stalled construction schemes revived
£15.5 billion-worth of stalled construction projects came back on stream in 2014, a 50% rise on 2013, according to Glenigan’s market research. This was the second consecutive year that the value of projects coming back into development exceeded those put on hold, which totalled £11.9 billion.
The value of stalled projects decreased by 2% last year, sustaining the 78% drop recorded in 2013, a period when confidence rebounded rapidly.
The value of commercial projects coming back into progress was £5.4 billion in 2014, a 50% rise on 2013. This increase was largely due to an increase in schemes valued at over £50 million, which accounted for £3.8 billion — more than double the £1.8 billion of these projects in 2013.
Glenigan economist Tom Crane, said, ‘Overall, the figures reflect the relatively stable conditions of 2014, as it was the availability of skills and materials, rather than work, which rose in prominence as a concern during the year.
‘Nevertheless, the overhang of stalled construction projects which had built up during the downturn continues to edge down. Some of these schemes will need to re-submit planning applications, and some will be reconfigured by developers in response to changes in demand — such as substituting leisure space for private-sale apartments.
‘In addition to being an indicator of firm confidence among the industry’s clients, the flow of projects coming back into development is also translating into workloads, with a number of schemes already starting on site.’
Glenigan data suggests private clients and developers are leading the way in dusting off larger schemes for construction.
Overall, 20 commercial projects valued at £50 million or more came off the shelf in 2014, of which six are in London. The office market has shown signs of reawakening outside of London in the last two years, especially in major regional centres such as Birmingham, Manchester and Glasgow.
Projects valued at over £50 million have also come back into progress in Jersey, Coventry and Nottingham during 2014.
One of the largest commercial schemes recently brought back into development is the £850 million St James Quarter in Edinburgh. The scheme received outline planning approval in 2009 and is set to begin construction this year to create 70 000 m2 of retail space and 250 apartments.