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Lendlease to start £275m Hammersmith scheme

June 29th, 2016 Comments off

Lendlease is set to start construction next month on a £275m office complex at 245 Hammersmith Road in west London.

STREET-fix

Legal & General Property has sold a 50% stake to Mitsubishi Estate London to form a new partnership to develop the 250,000 sq ft scheme.

The speculative scheme has been designed by Sheppherd Robson and already has planning consent from Hammersmith & Fulham Council.

The new building will consist of a basement, ground and 11 upper storeys and an extensive public realm, including a new urban park and plaza to the Hammersmith Road.

Simon Wilkes, Head of Business Space Development, Legal & General Property, said: “245 Hammersmith Road will be much more than just an office building; we are creating a destination with modern working and lifestyle trends at the core of our thinking.

“It will set a new standard for Hammersmith. There is still a lack of Grade A development taking place which means we are set to benefit from rental growth.

“We are already seeing high levels of interest from blue chip occupiers, who are particularly drawn to the design and location of the scheme, especially given the competitive nature of the rents compared to the West End.”

The scheme should be completed in the first quarter of 2019.

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Contractors call for calm as Brexit victory spooks markets

June 27th, 2016 Comments off

Reporting from Friday the day after the BREXIT vote. Construction and property bosses appealed for calm today after the country voted to leave the European Union.

The result sent shock waves through the financial markets as the pound tumbled and the stock market lost 8% in early morning trading.

House builders were among the hardest hit with 20% falls in some big names like Taylor Wimpey.

Leave won a shock victory with a 52% to 48% majority as more than 30 million people voted.

During the campaign stay campaigners warned that an exit vote would push up construction prices by 15% and lead to a drop in investment.

One contracting boss said: “The world has certainly changed this morning.

“The vote is a shock and markets are reeling but construction is a long term game and we’ll just have to see how this pans out.

“Some projects may get shelved in the short term but the facts remain that this country still needs more housing, infrastructure and commercial buildings and I just hope the Government keeps focused on that.”

CECA Head of External Affairs, Marie-Claude Hemming said: “The change in circumstance has unsettled the markets which, if unchecked, may discourage long term investment in UK infrastructure.

“The UK must act to secure its economy, but growth will only be delivered if supported by world-class infrastructure.

“CECA therefore calls on Ministers to now to first stabilise Government, then re-establish their commitment to the projects outlined in the National Infrastructure Plan, most notably HS2 and a third runway at Heathrow in order to maintain economic confidence following such a substantial change in the UK’s relationship with the European Union and the rest of the world.”

Mark Clancy-Jones of Knight Frank said: “The decision by UK voters to leave the European Union will cause volatility across all investment markets, and real estate will be no exception.

“Uncertainty over future economic conditions in the UK will cause some deals on hold to be shelved, andoccupiers will reconsider the amount of space they need outside of the single market.

“A fall in the value of sterling, combined with falling property values will be a buy sign for opportunistic overseas investors once the initial correction has occurred.

“This will cause a widening yield gap as real estate yields rise and bond rates fall from further Bank of England monetary loosening and will make property a favoured asset class in an unpopular investment destination.”

Alan Brookes, UK Chief Executive Officer of Arcadis, said: “Brexit is a game-changer. The challenge for the construction industry is not simply to respond to Brexit but, more importantly, respond to the opportunities that Brexit will bring.

“Construction markets are likely to become more volatile in the short term, and we need to consider a joined-up approach to sustaining the capacity and capability of the industry.

“Although demand is likely to fall in some sectors this could actually take some of the pressure off over-stretched markets. Ultimately the UK needs to keep building. Housing and infrastructure, for example, may now be able to secure capacity at a lower cost.

“One of the big questions we now face is: how can we ensure we have enough people with the right skills to build the houses, roads and rail lines of the future?

“In the future, European labour may no longer be the safety-valve it has been, so we must plan to use the workforce differently.

“Using more offsite components and investing in skills and the management of projects will now prove absolutely vital.”

Brian Berry, Chief Executive of the FMB, said: “The UK construction industry has been heavily reliant on migrant workers from Europe for decades now – at present, 12% of the British construction workers are of non-UK origin.

“The majority of these workers are from EU countries such as Poland, Romania and Lithuania and they have helped the construction industry bounce back from the economic downturn when 400,000 skilled workers left our industry, most of which did not return.

“It is now the Government’s responsibility to ensure that the free-flowing tap of migrant workers from Europe is not turned off.

“If Ministers want to meet their house building and infrastructure objectives, they have to ensure that the new system of immigration is responsive to the needs of industry.”

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McLaren lands £90m mega-shed for homeware giant

June 23rd, 2016 Comments off

McLaren Construction has won the contract to build a £90m distribution centre for homeware giant The Range near Bristol.

mega-shed
The mega-shed will be the size of 15 Wembley Stadiums

 

Rival bidders say the job has gone to McLaren who will start on site shortly.The deal was also confirmed by development partner Stoford.

Work is expected to start on site shortly and take 12 months to complete.

The 1.2million square feet warehouse will be built at the Central Park logistics centre in Avonmouth and will be the size of 15 Wembley Stadiums.

Chris Dawson, founder of The Range, said: “This distribution centre is a big step in the expansion plans that I have for the business; it’s non-stop for us.

“When the warehouse is up and fully operational, it will act as a training hub for smaller distribution centres around the country.”

Stoford has also bought another 20 acre site at Central Park.

The firm plans a £43m speculative development of three warehouse and logistics units which will be built by main contractor Winvic Construction.

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Brookfield plans 37-floor London city tower

June 21st, 2016 Comments off

Developer Brookfield is bringing forward plans for a new tall building at 1 Leadenhall in the City of London.

Towers london Brookfield 1Leadenhall
Image of existing and planned central London towers, including 1 Leadenhall building

 

The tower will rise to 37 floors, which will be a more modest office building compared to the scale of some of the more ambitious plans unveiled for the Square Mile.

Architect Make has designed the 183m tower that will boast a public galley with views over the Leadenhall Market.

The existing seven storey building on the 1 Leadenhall site, known as Leadenhall Court will be demolished over six months once approval is obtained.

Under present plans work could start on the new tower as early as March 2018.

Brookfield has gone out to public consultation with the plans ahead of submitting for planning later in the Summer in the hope of gaining approval at the end of this year.

Planned and built towers in Square Mile cluster

London city towers

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Construction output rebounds by 2.5% in April

June 17th, 2016 Comments off

After several months of decline, construction output bounced back in April rising 2.5% compared with March.

All new work increased by 2.9% while repair and maintenance also increased 1.9%, despite growing fears in the industry that the EU referendum is slowing project starts.

The latest output returns represented the largest month-on-month increase for over two years, although April activity remained 3.7% below a year ago.

But the underlying three-month trend after several months of poorer figures showed output in the construction industry decreased by 2.1% against the previous period.

April Output

Seasonally adjusted construction output since 2010

First quarter new order figures, which were also released today, were 1.2% down on both the previous quarter and the same period a year ago.

Professor Noble Francis, Economics Director at the Construction Products Association, said:  “Today’s output figures are, of course, encouraging, but what is of greater interest are the ‘forward-looking’ new orders. 

He added: “The underlying fundamentals for the construction sector remain strong, so the modest fall in new orders may reflect a slight impact from uncertainty around the EU Referendum. 

“We would also expect new orders in Q2 to suffer a greater impact from this same uncertainty; however, this could all be offset in the second half of the year once the vote is out of the way.”

“More encouraging is that new orders in the infrastructure sector continue to go from strength-to-strength, up 27% in Q1 versus Q4 and up 16% versus a year ago. 

“As we’ve highlighted in our own forecasts, this sector looks set to lead activity for the wider industry over near-term.”

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What’s holding the Construction Industry Back?

June 15th, 2016 Comments off

It has been repeatedly reported that the UK’s construction industry (housing construction in particular) was one of the first sectors to feel the full scale of the impact the recession bought with it, and was also one of the slowest when it came to recovering.

While many other industries have been benefitting from a widening talent pool thanks to the ever advancing digital revolution, it seems that the construction industry is experiencing a tightening on the talent that is readily available.

In 2014, the Construction News Barometer found that almost 90% of construction leaders said that the skills shortage was one of the top challenges that their business faced. 88% of leaders also thought that a lack of both skills and staff was a major concern for the future of the business. Employment figures over the past few years have caused concern in the industry because it appears that it is suffering from a shortage of skilled workers.

In fact, the UK construction industry saw a decrease in ‘all work’ by 4.5% when compared with March 2015. The recession has created a paradox, because while we are experiencing a lack of skilled labourers there is also approximately 150,000 skilled construction workers that remain unemployed. While some of these workers have re-entered the sector, many have gone on to find work in industries that are flourishing, such as financial services and manufacturing. This being said, the total economic output for the UK construction industry in 2014 was £103 billion, 6.5% of the UKs total output; just 0.4% shy of its highest contribution in 18 years which was 6.9% in 2007.

Lee Bryer, Research and Development Operations Manager for the Construction Industry Training Board (CITB), added: “Many of them may be lost to the industry for good, as that has happened with other recessions, but other people could be waiting for the right conditions. The issue is where the work is: whether the wage is attractive enough and whether they are appropriately skilled.”

In July 2013, the coalition government published Construction 2025; a document that outlined the 10 year industrial strategy that would work to:

  • Reduce the initial cost of construction and the whole cost of life assets (from 2009/2010 levels) by 33%
  • Reduce the overall time from inception to completion for a new build and refurbished assets (based on industry standards in 2013) by 50%
  • Reduce greenhouse gas emissions in the built environment (compared to 1990) by 50%
  • Reduce the trade gap between total exports and total imports for construction products and materials (from February 2013 deficit of £6 billion) by 50%

A Plan for Growth policy was also published alongside the 2011 budget; this outlined the way that the government planned to encourage growth in a number of UK industries, construction to be one. The policy highlights the importance of the investment in house building and infrastructure projects for our economy. It also contained particular actions the Government were to carry out that would assist the growth of the construction industry, along with general actions such as reforming the planning system and reducing regulations. The FirstBuy housing scheme has seen jointly funded equity loans helping a forecasted 10,000 extra people purchasing new homes; this is expected to accelerate growth in the sector along with stamp duty tax reforms.

“While I think that overall, yes there is a skill shortage within the construction industry, I’m happy to say that we have not been affected so far. We specialise in period and listed properties, it’s a niche area and there is always a demand for our skills, especially given the area that we live in. explains Steve Gilbert, owner and director of Steve Gilbert Building Services, “However, if this industry and the skills required aren’t recognised and nurtured properly at an appropriate age then I can see it swiftly becoming a real issue. It would be difficult to continue our business for many years to come if I don’t have the trained employees to carry out the level of work required.”

Just as the dust was beginning to settle when it came to political elections and policies, the Brexit gun was fired. The industry has relied heavily on foreign workers for a number of reasons, in both skilled and non-skilled positions. However, contrary to popular opinion, this is not an entirely new activity. Back in the mid-20th century there was a labour shortage which was filled with Irish migrant workers. At present, the movement between countries in the EU has meant that the construction industry has a vital resource of workers, an exit would potentially mean the resource would dry up almost instantly and the sector could once again face a skills shortage.

However, it’s not only the skills shortage we could face due to leaving the EU. The European Union is a trading union, removing the barriers that could make trading and investment between countries more difficult. In fact, a number of large manufacturing giants have already voiced their concern about continuing to trade with Britain should they leave the EU. As we would be the first country to ever leave the EU, it’s unlikely that companies would be willing to invest until the post referendum financial landscape provides a clearer picture.

Does anyone remember when George Osborne said “Britain is open for business”? Let’s hope that he is that passionate about those words that he is working tirelessly in a pursuit to protect the notion, especially when it comes to the UK construction industry.

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Failed PHD1 Construction owes subcontractors £7.8m

June 14th, 2016 Comments off

Subcontractors have been left holding £7.8m of unpaid bills following the failure of PHD1 Construction.

CDC_New Chinatown_Sunken Street_151208
Former PHD1 staff are now helping to build the £200m new Chinatown scheme in Liverpool

The North West contractor fell into administration in April.

PHD1 worked on a number of high profile sites across the region.

An administrator’s report said clients started slowing payments to PHD1 which had a knock-on effect to its suppliers which resulted in a winding-up petition being issued.

The administrator’s report said the company effectively ceased trading in February when it was working on six incomplete sites.

The last set of results for PHD1 showed the firm made a pre-tax profit of £384,000 on a turnover of £22m for the year to January 31 2015.

Employees of PHD1 were transferred to a new company called Bilt NCT.

Bilt Group has now started work on Liverpool’s new £200m Chinatown development.

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Increase in construction job vacancies not necessarily good news, says recruiter

June 13th, 2016 Comments off

Job figures rising to a four-month high in May isn’t necessarily good news for the construction industry, according to One Way.

An analysis by the construction and rail recruitment specialist found that the growth in the number of newly created jobs, outlined in the Markit/CIPS UK Construction Purchasing Managers’ Index, merely highlighted the worsening skills shortages that continue to impact the sector. This is made particularly concerning by the fact that rising job vacancies come at a time when industry output has slumped to a three-year low.

Managing Director of One Way Paul Payne, comments.

“On paper a rise in job vacancies should be great news for us, but when you consider the bigger picture it only highlights the growing skills shortages that the industry faces. Job vacancies have risen because there simply aren’t enough professionals to meet the demand, and that’s at a time when output is at a three-year low. Imagine what the situation will be like when we get over the Brexit uncertainty and look to raise productivity once again.”

“We’ve been banging the same drum for some time now, but something needs to be done before we hit a wall and projects have to be put on hold because of skills shortages. The issue is a ticking time bomb and unless something drastic is done soon, the industry could be in big trouble. That’s not to mention what could potentially happen if we were to leave the EU and talent pipelines from across Europe were affected. Obviously this is great news for current construction professionals who are likely to pick which projects they want to work on, and what they’ll be paid, but for the industry as a whole it’s a real worry.”

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Manchester booms as two major schemes approved

June 8th, 2016 Comments off

The building boom is Manchester has been fired up further after two major schemes gained planning approval.

Manchester-Engineering-Campus

The largest will see Balfour Beatty now start work later this year on the University of Manchester’s £350m engineering campus.

The Manchester Engineering Campus Development will be one of the largest, single construction projects ever undertaken by a higher education institution in the UK.

At 195m long, the development’s main building – MEC Hall – could easily accommodate Manchester’s tallest building, Beetham Tower, laid sideways.

Architects Mecanoo designed the flagship project which will open in 2020 and bring together a multi-disciplinary engineering and scientific community and consolidate the University’s student campus around Oxford Road.

Manchester_Engineering_Campus_Development_Mecanoo_dezeen_784-2

Located opposite the National Graphene Institute on Booth Street East and adjacent to the Manchester Aquatics Centre, the new site will act as a gateway between the existing University campus and the city

City Council planners have also nodded through the largest building phase of the £750m Circle Square scheme, which will stand in the place of the former BBC site at the heart of Corridor Manchester.

Joint venture developers Bruntwood and Select Property Group have got the thumbs up for a 36-storey residential tower, and two office blocks of 18- and 14-storeys.

Construction of this major element, known as phase 1b, will start in early 2017.

In total this part of the scheme will deliver 105,000 sq ft of shops and restaurants, over 300,000 sq ft of workspace, 677 flats and 1,000-space multi-storey car park.

circle-square-manchester-resized_640_400_90

Mark Stott, CEO of Select Property Group, said: “This is a landmark day for Circle Square and signals the start of an exciting chapter for the scheme.”

Eventually the 2.3m sq ft neighbourhood, which will be built in five phases, will include residential, commercial and public space amenities as well as a shops. 

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Hochtief Murphy wins tunnel for £2.4bn York potash mine

June 6th, 2016 Comments off

A joint venture between Murphy and Hochtief has been named preferred bidder for the main tunnelling contract for the planned £2.4bn potash mine in North Yorkshire.

Whitby Potash mine

Plan advances to mine the world’s largest deposit of potash

Sirius Minerals, a fertilizer producer, hopes to start preparatory building work at the site near Whitby shortly, with the mine opening in 2021.

A 23-mile tunnel will be built, so minerals can be transported to a processing plant on Teesside.

The fertilizer producer also named Associated Mining Construction – formed from specialist firms within the Thyseen and Redpath group – as preferred bidder for shaft sinking at the mine site.

York-PotashTBM-strategy

The Murphy Hochtief joint venture will design and build the underground mineral transport system to link the mine with the materials handling facility.

This will involve a 6m diameter TBM-bored tunnel between the mine head site at Dove’s Nest Farm near Whitby, and a portal near the town of Redcar.

Designed by Arup, the plan is to use five hard rock TBMs, which will be lowered in at four intermediate staging shafts. The starting depth will be around 360m below the surface at the mine head.

The 12-month first phase of work will comprise front end engineering design and a detailed geotech programme along the route.

From this work a refined estimate based on a full design will be compiled, prior to agreement of the contract sum.

Chris Fraser Managing Director and CEO said: “This is the culmination of a huge amount of work by both the successful bidders and those that have been unsuccessful and we thank all of the groups involved for their efforts.

“We are delighted to now be moving forward with our selected partners towards the implementation of the Project.”

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