Construction is routinely looked to as a marker for the economic health of a city or region. Our Real Estate Regional Crane Surveys highlight this link between development and prosperity, examining the external influences and key market drivers of city centre construction.
Navigating through adversity
The Crane Survey results this year show that the appetite for new schemes coming forward has remained relatively resilient, primarily driven by developments which were in the pipeline prior to the COVID-19 pandemic. Eleven Grade A office developments were under construction or completed in 2020, amounting to 1.3 million sq ft, over 300,000 sq ft more than the previous year. As in the previous year, 2020 saw no new hotel developments, following a surge in completions during 2016-2018. This sector clearly faces substantial uncertainty with respect to the return of events and out-of-state leisure visitors and business travellers.
Staying on track
Development activity continues across Birmingham city centre with great anticipation as we all look forward to hosting the Commonwealth Games in July next year. Beyond that, the arrival of HS2 and the first brand new intercity terminus station built in Britain for over 100 years, means Birmingham is continuing to attract national and international interest. Developers are continuing to push forward with new schemes and the pipeline is strong despite the pandemic.
People centred growth
Despite a year of uncertainty, 2020 has maintained the same number of new starts for Leeds when compared to 2019. We have seen the second highest quantum of office floorspace delivered in the history of the Leeds Crane Survey, as well as a sustained level of activity in the residential sector. The skyline of Leeds City Centre continues to develop with a number of notable schemes under construction and in the pipeline, and so we expect 2021 to be another strong year for construction.
The appetite for new schemes coming forward has remained very resilient, with numbers consistent with 2019. The hospitality industry has unsurprisingly seen a decline, with hotel occupancy at record lows and expenditure in local shops and businesses limited to online and takeaway. However, irrespective of COVID-19's short term impact on specific business sectors, the long-term demand to encourage more people to live and work in the regional centre remains.