April 9, 2010
SHELVED PROJECTS REVIVAL GIVES HOPE TO STRUCTURES MARKET
BAR 3.10
9thApril 2010
SHELVED PROJECTS REVIVAL GIVES HOPE TO STRUCTURES MARKET
The structural frames market is usually the first hit in a downturn as developments are put on hold. However, the growing demand for new office space in London and revived office, retail and leisure developments outside of the capital are giving rise to optimism that it may be the first to benefit from any upturn.
Despite concerns over the economy and the forthcoming election, during the 1st quarter of this year 2 million sq ft of office space has been let in the City of London. This is the second highest total since records began in 1984. Meanwhile, the trickle of retail space that is due to open during 2010 could result in unmet pent-up demand by 2012.
The letting boom has resulted in a growing shortage of high-quality properties and rising rents. Office rents in the City of London are up by 8 per cent in the first quarter of 2010. This is not gone unnoticed by developers who are taking the dust sheets of schemes that were put on hold due to the recent recession. Land Securities are considering reviving plans for its Fenchurch Street scheme, British Land are said to be looking again at a number of projects previously mothballed including the 47-storey skyscraper at 122 Leadenhall Street and Great Portland Estates has confirmed that it plans to start work on 100 Bishopgate in 2011-12.
Meanwhile, in Swindon the Union Square business and retail development is due to start construction this Summer whilst in Blackpool the go ahead has been given for a £220 million regeneration project that includes 160,000sq m of office and business space. A further cuase for optimism are the out-of-town expansion plans of John Lewis, Next Home, Best Buy and TK Maxx.
“The news that developers are increasingly confident about reviving shelved schemes is welcomed”, said Graham Mackenzie, Chairman of the British Association of Reinforcement. “By being positioned early in the project cycle, the concrete structures sector was among the first to experience the downturn in 2008. The expansion of public sector work for new schools and hospitals was an important source of work during 2009 however with the possibility of significant public sector cuts after the next election, indications that the private office and retail market is beginning to show signs of life provides some optimism for the future.”
He continued: “Post-recession, developers will be keen to get the best possible price. Concrete with its free, built-in performance benefits such as fire resistance, sound insulation and thermal mass together with short lead times means that it is well placed to provide cost-effective structural solutions.”
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