The burgeoning
development operation at Morgan Sindall is making the contractor one of the
construction industry’s biggest clients.
Morgan Sindall’s
development arm Muse has let £306 million-worth of work in the 12 months to
April 2018 according to Glenigan’s construction market research.
Morgan Sindall is ranked in 16th
position in Glenigan’s latest ranking of the top 100 construction clients. A
year ago, Morgan Sindall was ranked in 44th place after letting work totalling
£164 million.
Muse is working with
a number of local authorities on regeneration schemes from Bournemouth to
Warrington, where the group was selected for a £130 million development
programme last summer.
Construction
contracts awarded by Muse over the past 12 months includes a £65 million office
project in Warrington and in 2017 Morgan Sindall’s regeneration operations had
revenue of £175 million.
To appear in
Glenigan’s rankings of the construction industry’s biggest clients, companies
must have let contracts to an external contractor and Muse is awarding work not
to Morgan Sindall but to other companies.
Contractors with
development operations typically let construction work to rivals to get a
better price and Glenigan’s research shows that VINCI is working for Muse on
the Bridge Street Quarter project in Warrington.
Elsewhere, Conlon is
building the £50 million Market Quarter scheme in Preston for Muse, which
recruited Bowmer & Kirkland for a £20 million industrial construction
scheme being developed with Premier Farnell.
North Midland
recently announced plans to form a development arm and a number of other
contractors already use spare cash to develop construction projects, which can
dwarf contracting income.
In 2017, Henry
Boot’s contracting turnover was £81.9 million but revenue from property
investment & development was £250 million and the company also features
among Glenigan’s top 100 clients.
Henry Boot is ranked
in 88th position in ranking of the top 100 construction clients for the 12
months to April 2018. The group awarded £108 million-worth of work. Outside
contractors used by Henry Boot include Robertson, which is building the £35
million Aberdeen Exhibition & Conference project.
Kier’s property
division has a development pipeline estimated at £500 million and also works in
joint venture. This includes Solum Regeneration, which is a 50:50 JV with
Network Rail.
In the 12 months to
June 2017, Kier’s property division turned over £182 million and had a
development pipeline valued at £1.4 billion.
Kier is ranked just
outside the top 100 construction clients but also let £82 million-worth of work
to external contractors in the 12 months to April 2018 according to Glenigan’s
data.
This research shows
that Kier considered bids from leading contractors including Bouygues,
Interserve and McLaren before awarding Galliford Try a £23 million deal to
build out student accommodation in Southampton.
Other contractors to
have awarded construction schemes to external contractors over the past 12
months include Bowmer & Kirkland with £75 million-worth of awards.
With industry
workloads unsettled and commercial clients jittery due to Brexit, pursuing
income from property development looks likely to remain an important strategy
for major contractors.
