UK commercial and retail construction hits two-year high | 24 November 2014
October saw UK commercial and retail construction contracts reach levels not seen in two years.
In its latest ‘Economic and Construction Market Review’, Barbour ABI found that contracts totalling more than £1.2 billion were awarded in October alone – a 15.9 per cent increase on September’s figures. Year-on-year, the increase was 74.7 per cent.
The wider construction market hit contract values of £7.5 billion in October, meaning the commercial and retail sector accounted for some 16 per cent. With housing contracts having stolen a march in recent years as mortgages become more readily available, these most recent figures represent a step in the right direction for the commercial property market.
As expected, London was the best performing market in October, having been responsible for just over a quarter (25.3 per cent) of all deals done. This was driven by large-scale deals in Paddington and Watford, which collectively generated contracts totalling around £170 million.
When looking specifically at the hotel, leisure and sport sector, though, it was Wales which came out on top. In this demographic alone, Wales secured contracts amounting to £331 million – or 43.8 per cent of the UK’s total. Much of this, though, can be attributed to the Circuit of Wales track in Ebbw Vale reaching its final stages of planning, insidermedia.com notes. Construction on the race course is set to begin in the New Year, so it would be ready to host the British MotoGP in 2016.
The race course wasn’t all that helped drive Welsh interests in the sector, though, as deals in Cardiff and Prestatyn added more than £10 million of hotel, leisure and sport contracts to the total.
Commenting on the report, lead economist at Barbour API, Michael Dall, told hvnplus.co.uk: “The value of commercial contracts awarded in the commercial and retail sector in October rose to its highest level since 2012, which is hugely encouraging for the wider industry.
“It’s no surprise that London was the main location of activity in the sector this month with 25.3 per cent of the value of all contracts awarded, largely due to the £80 million office development of Four Kingston Street, Paddington, the mixed use development at North Wharf Gardens, also in Paddington, worth £65 million, and the Charter Place complex in Watford valued at £25 million.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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