Despite wider
economic uncertainty, commercial developers building out office and warehouse
projects still comprise 11 out of the top 100 construction clients according to
Glenigan’s latest contracts leagues.
The biggest spending
commercial developer in the latest leagues is Vastint, Owned by Swiss group
Intergogo Holding, Vastint placed a dozen contracts in the 12 months to May
2018.
These contracts are
valued by Glenigan’s construction market analysis as worth £450.1 million-worth
and rank Vastint in 10th place.
Construction
contracts let by Vastint range from the £55 million Strand east Plot on the
Sugar House Land development in east London to the £117 million Dane’s Yard
Development, also in the east of the capital at Newham. Henry Construction is
building both projects.
With Legal &
General mostly developing residential projects, the next highest commercial
developer is Roxhill, which let £276.2 million-worth of work in the latest year
according to Glenigan’s construction industry research.
Roxhill typically
works on industrial and warehouse projects and can develop work in joint
venture with other developers, such as SEGRO. The two companies are working
together at the East Midlands Gateway development zone on projects including a
46,450 sq ft unit warehouse for Amazon.
Argent is in 28th
position after letting £217 million-worth of commercial work including the £90
million S1, Handyside office block at King’s Cross Central, which is being
built by BAM Construct.
Land Securities,
British Land, which is behind the £53 million Drake Circus Leisure scheme in
Plymouth, MEPC and Prologis are also in the top 50.
Other commercial
developers are inside the top 100 construction clients, including IM
Properties, which has let £132 million-worth of work including the £55 million
Nobel Way scheme in Birmingham.
Bruntwood, SEGRO and
Prudential are also in the lower reaches of the top 100 clients according to
Glenigan’s construction market data.
Overall, all this
work, which is solely office and industrial related and excludes retail and
residential work, is valued at £2 billion. By value, this total is 7.4% of the
total spending by the industry’s top 100 clients.
After a weak period,
commercial development activity grew for a second month in a row in May 2018
according to the IHS Markit/CIPS index and Glenigan’s contracts leagues back up
this rise in activity.
A year ago, although
there were also 11 commercial developers amongst the top 100 construction
clients only three were in the top 50.
Total spending by
the 11 commercial clients in the latest top 100 is down 13%, but that is partly
because of one major scheme, the £850 million St James Quarter project in
Edinburgh.
At an underlying
level, activity is rising with 94 commercial construction projects let in the
latest leagues. This excludes the rising number of projects awarded by main
contractors turning to commercial development as also highlighted by Glenigan’s
recent construction research into this area.
