Figures released by construction industry analysts Glenigan reveal £15.5 billion of stalled schemes came off the shelf during 2014 – up 17% on the previous year.
For the second consecutive year, the value of projects coming back into development exceeded those put on hold, which totalled £11.8 billion.
The value of stalled projects decreased by 2% last year, sustaining the 78% drop recorded in 2013 - a period when confidence rebounded rapidly.
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.”
He added: “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.
The value of commercial projects coming back into progress was £5.4 billion in 2014, a 50% rise on 2013. This increase was entirely due an increase in schemes valued at over £50 million, which accounted for £3.8 billion of this total, more than double the £1.8 billion of these sized projects in 2013.
Overall 20 commercial projects valued at £50 million or more have come off the shelf during 2014, of which six are in London. The office market has shown signs of a reawakening outside of the capital in the last two years, with attention primarily focused on major regional centres such as Birmingham, Manchester and Glasgow.
However office 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 TIAA Henderson’s £850 million St James’ Quarter development in Edinburgh (Glenigan Project ID: 08049363).
The scheme received outline planning approval back in 2009 and is set to begin construction this year, creating 750,000 sq ft of retail space, a hotel and 250 apartments.
The development was unlocked due to a £61 million funding deal, supported in part by a loan of public funds to be paid back by retailers’ higher rates after the project’s completion. This mechanism is called a RAM (Regeneration Accelerator Model), similar to Tax Increment Financing (TIF) which has been used successfully to spur investment into Glasgow.
