Glenigan figures show bright areas for construction
Figures from sales-lead specialist Glenigan show that in spite of a subdued economy, there are areas of demand for specialist contractors.
Figures from sales-lead specialist Glenigan show that in spite of a subdued economy, there are areas of demand for specialist contractors, including fit outs and office refurbishment.
The sector has been buoyed up by a series of major refurbs of government offices. Some large private sector groups are also investing to update and modernise their commercial space.
Overbury and Morgan Lovell, part of Morgan Sindall Group, one of the leaders in the sector, recently reported a 13% increase in revenues at its fit-out division to £831 million and a record profit of £43.8 million, which was above its target range. But the competitive nature of the sector was reflected in an unchanged margin of 5.3%.
Other firms are seeing demand too, with major new projects started over the past year including 220,000 sq ft of space at Royal Dutch Shell's new multi-story office in London; a 27-storey fit out at the nearby Shell Centre tower; and a 155,000 sq ft fit out at BBC Cymru Wales' HQ in Cardiff.
The need to reconfigure and modernise central government offices is emerging as a key source of construction-related work for fit-out specialists. Tenders are currently being invited for a £16 million office refurbishment and fit out at the Dept of Transport’s London base at Horseferry Road, where work is set to start in summer 2019 and continue for 18 months.
Government continues to be a major client for the construction industry. Construction work is set to start this coming August on a £20 million fit out of the HMRC Government Hub in Edinburgh and continue for nine months, with Turner & Townsend acting as project manager. Tenders have also been returned on a £20 million fit out at HMRC’s Cardiff office with work set to start in July and continue for 20 months.
The hotel sector is also proving buoyant. The budget hotel sector is picking up, with easyHotel and Yodel spending money on improving their buildings to create distinctive spaces. And in the boutique hotel sector, clients are adding features such as spas, gyms and restaurants to appeal to potential customers.
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