Regional bright spots offer fertile ground for 2024 contracts

Latest News Wed, Feb 14, 2024 7:49 AM

A series of bright spots for contractors seeking new work opportunities across the UK regions this year emerge in the January edition of the Glenigan Construction Review covering the final quarter of 2023.

It shows that project starts in the fourth quarter in the West Midlands and the North East saw healthy rises on both the previous three months and on a year earlier.

Meanwhile, new project starts in the South East, the North West and Yorkshire & the Humber all picked up in the fourth quarter compared to the previous three months.

A virtual doubling in the value of new private housing starts in the West Midlands – which were worth £1.17 billion in the fourth quarter – helped to push up the value of total project starts in the region by 11% compared to the third quarter and 16% on a year previously.

The housing new work pipeline in the West Midlands is also looking stronger; planning approvals in the sector were up 15% in the region compared to a year earlier. One major scheme in the pipeline is MCR Property Group’s £251 million New Monaco BtR development in Birmingham (pictured) involving some 955 flats along with townhouses and retail and commercial space and where work is due to start in spring 2024 (Project ID: 04165327).

The West Midlands is also well-placed for an upturn in industrial construction after planning approvals worth £356 million were recorded during the fourth quarter, almost four times the level of the period in 2022.

Industrial construction is also set to pick up in Yorkshire & the Humber after the region saw planning consents worth £514 million in the fourth quarter, nearly triple the level of a year earlier. One flagship project at the pre-tender stage in the region is a £64 million development at the former Skelton Grange Power Station Industrial Estate near Leeds. It involves five industrial and distribution units and detailed plans have been approved and work is due to start this summer (Project ID: 22000663).

The North West also stands to benefit from an upturn in industrial activity this year. Planning approvals in the sector were worth £501 million in the fourth quarter, double the level of a year earlier.

Significant projects at the pre-tender stage where detailed plans have been granted include the £40 million Hollinwood Industrial Phase 2 scheme in Oldham involving nearly 18,000 sq m of space. Work on the project is pencilled in to start this coming autumn and run for 11 months (Project ID: 23217582).

A surge in new office construction in the North East in the fourth quarter helped drive up the value of total project starts in the region by 31% on the previous three months to stand 14% up on a year before. New office starts in the region were worth £61 million in the fourth quarter, a nine-fold increase on the level in the period in 2022.

A further boost to new office construction in the region should come from the £397 million Crown Works Studios film and TV complex in Sunderland where detailed plans were submitted before Christmas. Work on the scheme, involving nearly 156,000 sq m of space, is set to start in late autumn this year (Project ID: 23063401).

Data centre opportunities

New data centres are creating opportunities for contractors in the South East. The recent start of work on Phase 2 of the £200 million Slough One Data Campus (Project ID: 23400133) gave a boost to office starts in the region in the fourth quarter. Meanwhile, total project starts in the region were up 16% on the previous three months.

Other significant new data centres projects in the Home Counties are in the pipeline. The go-ahead last month for a new £800 million Google Data Centre at Waltham Cross in Hertfordshire is set to give a boost to the offices workload in the East of England when work starts on the 62,000 sq m facility this summer (Project ID: 23299434).

It comes after a near-tripling in the value of office planning approvals in the East of England in the fourth quarter compared to the previous year and driven by a green light for the £500 million Botanic Place project in Cambridge (Project ID: 19443557).

For full analysis of Q4 performance download the January 2024 Glenigan Construction Review now.

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