UK regional cities
are reporting record levels of construction activity as developers’ confidence
for city centre residential development remains strong.
The latest reports
in the Deloitte Real Estate Crane Survey UK series monitor construction
activity in Belfast, Birmingham, Leeds and Manchester.
Each city has seen a
sustained or increased level of development across a range of sectors including
offices, residential, hotels, retail, education and student housing.
Simon Bedford,
partner and regional head at Deloitte Real Estate, said: “Residential
development stands out this year. The surveyed cities have shown a marked
increase in housing development, in some cases doubling activity from the
previous year. Our UK crane survey data shows a collective total of nearly
17,000 residential units currently under construction in these cities, ensuring
housing targets are being taken seriously and developers are striving to meet
demand.”
Exploring each
region, the Birmingham Crane Survey identified 24 new construction starts
breaking ground in 2017. The city’s residential development has accelerated
with 13 schemes starting construction, up 30% on the previous year, delivering
2,500 new units in 2018 alone. Student housing schemes are also up (53%) and
set to deliver at total of 1,782 bed-spaces. Birmingham’s office development
has surpassed one million sq ft for the second consecutive year, with over 1.4
million sq ft currently under construction, affirming developer and occupier
confidence in the city.
Manchester’s city
centre residential sector shows no signs of slowdown as 20 new residential
schemes started construction last year, exceeding 2008 levels for the second
year running. Across the 41 housing schemes, 11,135 units will be delivered to
market. The report also notes significant further progress in the office sector
with five new developments bringing the total office space currently under
construction to 1.5 million sq ft. Developers are also not shy of building
upwards, as six residential schemes will exceed 25 storeys on completion.
Similarly, in Leeds
the number of residential units under construction across the city centre is at
its highest in a decade - 1,586 units across five development sites. Leeds has
also witnessed further growth in the higher education sector with four new starts
recorded adding over half a million sq ft into the development pipeline. Leeds
continues to deliver good volumes of new office space with three new
construction starts in 2017.
The Belfast Crane
Survey, now in its second year, has recorded nine new schemes and a total of 25
schemes under construction. Residential development, albeit lower in volume
than other cities, has started to come forward. However, it is hotels that
dominate Belfast’s figures with over 1,000 new hotel rooms currently being
built and all due to complete this year, the highest number of any of the
cities in the survey.
In addition to the
four UK cities, the crane survey series has embraced Dublin’s development
activity for the first time. Ireland’s capital city has over four million sq ft
of office space under construction, as well as 3,528 residential units.
Dublin’s crane survey has also recorded 13 major student accommodation schemes
under construction, set to deliver 4,529 bed-spaces when all completed.
Bedford comments on
the office market: “Across all the cities, the office sector is benefiting from
serious investment as all locations sustained or significantly increased
construction.
"Leeds saw a
67% increase in new schemes starting development from the previous year and
similarly Belfast’s office construction is up a quarter on 2016. As the Irish
property market recovers, Dublin is positioning itself strongly as a European
capital city and is creating the space to deliver accelerated inward
investment.”
Bedford concludes:
“The results of our crane surveys reflect the growth and resurgence in the
regions, surpassing last year’s record breaking figures. Sentiment towards city
centre development is buoyant across all sectors, but it is perhaps the
residential private rented sector that is the stand out for 2017.
“The unparalleled
scale and volume of development is backed by significant investor confidence,
strong business communities and an influx of new talent. The demand for
property, particularly in the residential market, has never been more evident.”
