Construction activity resilient as UK cities build homes has been saved
Construction activity resilient as UK cities build homes
29 January 2018
UK regional cities are reporting record levels of construction activity as developers’ confidence for city centre residential development remains strong.
The latest reports in the Deloitte Real Estate Crane Survey UK series monitor construction activity in Belfast, Birmingham, Leeds and Manchester. Each city has seen a sustained or increased level of development across a range of sectors including offices, residential, hotels, retail, education and student housing.
Simon Bedford, partner and regional head at Deloitte Real Estate, said: “Residential development stands out this year. The surveyed cities have shown a marked increase in housing development, in some cases doubling activity from the previous year. Our UK crane survey data shows a collective total of nearly 17,000 residential units currently under construction in these cities, ensuring housing targets are being taken seriously and developers are striving to meet demand.”
Exploring each region, the Birmingham Crane Survey identified 24 new construction starts breaking ground in 2017. The city’s residential development has accelerated with 13 schemes starting construction, up 30% on the previous year, delivering 2,500 new units in 2018 alone. Student housing schemes are also up (53%) and set to deliver at total of 1,782 bed-spaces. Birmingham’s office development has surpassed one million sq ft for the second consecutive year, with over 1.4 million sq ft currently under construction, affirming developer and occupier confidence in the city.
Manchester’s city centre residential sector shows no signs of slowdown as 20 new residential schemes started construction last year, exceeding 2008 levels for the second year running. Across the 41 housing schemes, 11,135 units will be delivered to market. The report also notes significant further progress in the office sector with five new developments bringing the total office space currently under construction to 1.5 million sq ft. Developers are also not shy of building upwards, as six residential schemes will exceed 25 storeys on completion.
Similarly, in Leeds the number of residential units under construction across the city centre is at its highest in a decade - 1,586 units across five development sites. Leeds has also witnessed further growth in the higher education sector with four new starts recorded adding over half a million sq ft into the development pipeline. Leeds continues to deliver good volumes of new office space with three new construction starts in 2017.
The Belfast Crane Survey, now in its second year, has recorded nine new schemes and a total of 25 schemes under construction. Residential development, albeit lower in volume than other cities, has started to come forward. However, it is hotels that dominate Belfast’s figures with over 1,000 new hotel rooms currently being built and all due to complete this year, the highest number of any of the cities in the survey.
In addition to the four UK cities, the crane survey series has embraced Dublin’s development activity for the first time. Ireland’s capital city has over four million sq ft of office space under construction, as well as 3,528 residential units. Dublin’s crane survey has also recorded 13 major student accommodation schemes under construction, set to deliver 4,529 bed-spaces when all completed.
Bedford comments on the office market: “Across all the cities, the office sector is benefiting from serious investment as all locations sustained or significantly increased construction. Leeds saw a 67% increase in new schemes starting development from the previous year and similarly Belfast’s office construction is up a quarter on 2016. As the Irish property market recovers, Dublin is positioning itself strongly as a European capital city and is creating the space to deliver accelerated inward investment.”
Bedford concludes: “The results of our crane surveys reflect the growth and resurgence in the regions, surpassing last year’s record breaking figures. Sentiment towards city centre development is buoyant across all sectors, but it is perhaps the residential private rented sector that is the stand out for 2017.
“The unparalleled scale and volume of development is backed by significant investor confidence, strong business communities and an influx of new talent. The demand for property, particularly in the residential market, has never been more evident.”
Note to editors
About the Deloitte Real Estate Crane Surveys:
A crane survey is the definitive review of construction in a city region and is seen as a barometer of developer sentiment and future supply. Published 30 January 2018 are:
- Belfast (first published 2017);
- Birmingham (first published 2002);
- Dublin (first published 2018);
- Leeds (first published 2006); and
- Manchester (first published 2000).
Each report measures the volume of development taking place across that city centre and its impact. Property types include office, retail, leisure, residential, student accommodation, education and hotels. The reports include insight from developers building new schemes or undertaking significant refurbishment of the following: (Size minimum)
- Office -10,000 sq ft
- Retail – 10,000 sq ft
- Residential – 25 units
- Education, leisure and hotel schemes – significant scheme for inclusion.
The report is compiled by Deloitte’s in-house real estate teams who have monitored construction across the city. Deloitte’s field research is then verified with direct industry links and in-house property experts. The data capture period for these crane surveys may differ from region to region, but generally covers the 12 months of 2017. Top line data as follows*:
* Historic / comparative data not available for Dublin.
Deloitte Real Estate also publishes the London Office Crane Survey (first published 21 years ago) every May and November.
Deloitte Real Estate’s commercial property research team is focused on producing thoughtful and insightful publications, as well as comprehensive bespoke reports for investors, developers and occupiers.
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Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.
The information contained in this press release is correct at the time of going to press.
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