New commercial office projects are providing a growing source of new work opportunities for contractors around the country.
In response to continuing strong demand for prime Grade A office space in energy-efficient buildings, developers are pressing ahead with new and refurbished office projects of varying sizes.
The latest Glenigan Index shows that the value of underlying (under £100 million) office projects starts rose by 7% in the three months to April and stood 8% higher than a year earlier.
The upturn comes amidst increasing optimism amongst developers and agents on the outlook for the sector, helped by expectations of lower interest rates and continuing economic recovery after the general election.
The recent Royal Institution of Chartered Surveyors (RICS) commercial property monitor highlighted the first increase in office tenant demand in two years. Its survey showed a net balance of +6% of agents saw an increase in occupier demand across the office sector in the first quarter.
The RICS survey also underlined the potential for new construction work on reconfiguring and retrofitting office space to meet the changing needs of businesses. It showed that some 89 per cent of agents surveyed had seen a ‘repurposing’ of offices for other uses as more of their clients need less space.
Equally encouraging for contractors working in the sector are signs that the future pipeline of office projects is looking healthier. Helped by a surge in major projects, recent Glenigan data shows that office main contract awards were worth £2.17 billion in the three months to March, more than double the previous three months and 5% up on a year earlier.
London still accounts for the lion’s share of new office approvals; worth £1,151 million in the three months to March, some 30% of the UK total.
But Glenigan data also shows that the value of detailed planning approvals for office projects has been growing significantly in a series of key regions.
Compared to a year ago, office approvals in the North West grew by 451% to £454 million during the three months to March, by 310% to £545 million in the East and by 86% to £161 million in Yorkshire & Humber. Meanwhile, office planning approvals rose almost 13-fold to £487 million in the South West and nearly 19-fold to £513 million in the North East.
Glenigan data provides details on numerous significant office projects of varying sizes which are set to get underway around the country.
In Manchester, for example, detailed plans have been granted on a £175 million development of five office buildings involving almost 47,000 sq m of space and a new public realm at Electric Park in the city’s New Islington area (pictured). Work on the scheme is set to start later this year after a main contractor is appointed in the third quarter (Project ID: 20399565).
There are also opportunities for work on medium-sized projects. In Ramsgate on the south coast, tenders have been invited and work is set to start this autumn on a new £9.45 million global HQ office building for Hilger Crystals. Work on the scheme, involving almost 3,000 sq m of space is set to run for 11 months (Project ID: 23147851).
