Construction activity is rising strongly in the regions across the commercial, residential and student accommodation sectors according to the latest UK Cities Crane Survey from Deloitte Real Estate, who also say the positive trend will continue.
The survey carried out in Birmingham, Manchester, Leeds, Edinburgh and Glasgow shows a rise of 80% in the number of new projects starting construction in the past year compared to the year before. Four of the five showed a rise compared to only one the year before. The survey says 38 schemes were completed during the year and 50 schemes are under construction.
Deloitte says the rise in construction activity matches the recent signs of improvement in the UK economy generally. The commercial market is said to be on the cusp of a new development cycle with 11 new office construction starts, the largest number for five years. These projects will deliver 837,000 sq ft of new office space.
Deloitte head of research Anthony Duggan said as the pressure on the existing volume of Grade A space becomes more acute due to a previous lack of development, sentiment is improving and schemes are attracting funding.
Developers remain keen on student accommodation with new construction of purpose built student housing quadrupling over the year with 10 new projects started. This will deliver 2,900 bedspaces across the five cities and the positive trend looks like continuing as student numbers continue to rise.
Manchester has seen a surge in development activity, making it the most active of the five cities, with 19 new projects started including eight residential schemes. Glasgow has seen four construction starts compared to none the year before and Edinburgh nine.
Mr Duggan said:”This increase in construction is unlikely to be a one-off. With an improving residential demand, supply shortages appearing in a number of the commercial property sectors and signs of increasing activity from investors in regional commercial real estate, it looks like we will see more development activity over the next 12 months.”
(Photo: Stephen McKay)