果冻影院

Moxon Street scheme at Marylebone

The commercial construction sector is finishing the year strongly but the near-term future is less certain as private sector developers move in different directions.

The November update from the IHS Markit construction purchasing managers鈥� index showed a 鈥渟ustained鈥� increase in commercial activity.

果冻影院鈥檚 construction market research has also identified a swathe of construction contracts awarded on major private sector commercial schemes.

The biggest was a 拢300 million deal let to Kier for the Moxon Street scheme at Marylebone in central London.

Capital focus

London is the focus for major commercial projects, and 40 schemes set to provide 4.2 million square foot of space completed in the last six months, according to Deloitte鈥檚 latest Crane Hire Survey for Winter 2018.

Mike Cracknell, a director at Deloitte Real Estate鈥檚 capital projects advisory team, explains: 鈥淭his is the highest level of office space brought to market in over 14 years.鈥�

果冻影院鈥檚 market analysis however shows a shift within the wider commercial sector away from offices in London.

Moxon Street will provide luxury flats, while big projects outside the capital are progressing. These include a 拢183 million deal to build Birmingham鈥檚 tallest residential block in Birmingham for

Moda Living, the Amex House office and residential scheme in Brighton and the 拢235 million Meadowside residential development in Manchester.

Top developers

Moda Living is the highest ranked commercial developer in 果冻影院鈥檚 latest rankings of the industry鈥檚 top 100 clients.

Moda awarded 拢287.1 million-worth of contracts in the 12 months to November 2018 according to 果冻影院鈥檚 market analysis, and is ranked in tenth place in the top 100.

The next highest developer is Derwent London after placing orders for 拢263.1 million-worth of projects. This includes the 拢260 million Soho Place development in London, which includes offices, retail space and a new theatre.

Overall, there are 18 standalone commercial, industrial and residential developers awarding work to external contractors in 果冻影院鈥檚 ranking of the industry鈥檚 latest top 100 clients. Those developers have let 136 contracts worth a total of 拢3 billion. This total compares to 拢5.2 billion in the previous year, although 2017鈥檚 total includes 拢1.6 billion from three contracts for the redevelopment of Battersea Power Station.

To appear in 果冻影院鈥檚 top 100 ranking, companies must have let at least three contracts.

The Battersea Development Company did that and appeared but the biggest project let in the last 12 months did not as this was a one-off contract.

Sir Robert McAlpine is building the 拢1 billion Raffles scheme in London for a consortium of India's Hinduja Group and Spanish construction company Obrasc贸n Huarte Lain.

Including this project swells the latest figure for commercial orders, but the overall total is still down on a year ago.

The future?

A hiatus in commercial work is emerging as changes in the sector emerge.

果冻影院鈥檚 economics director Allan Wil茅n says: 鈥淟ast year鈥檚 sharp fall in detailed planning approvals has reduced the pool of projects in the pre-construction pipeline and is forecast to dampen commercial office starts during 2019 and 2020.

鈥淢ore encouragingly the recent recovery in approvals during 2018 suggests renewed confidence among investors in the longer-term prospects for the sector and is expected to lift project starts over the medium term.鈥�