Derwent reports 10% annual construction cost rises

Grant Prior 4 months ago
Share

Developer Derwent London said construction costs in the capital are currently rising at 10% a year.

80 Charlotte Street saatchi
The Charlotte Street scheme is being delayed by capacity constraints

Derwent also confirmed delays on some of its schemes due to a lack of capacity among contractors.

The firm said: “Construction cost inflation remains high, and capacity constraints on many contractors have seen delays across the industry including at some of our schemes.

We challenged the consensus indices that were reporting 4 to 6% annual inflation arguing that in central London it was actually running closer to 10% pa.  We expect it to continue at this level through 2016.”

Derwent is currently developing four major London sites with fixed cost deals at the White Collar Factory in EC1 and the Brunel Building in W2.

The developer said: “Our sensitivity to construction costs principally resides with The Copyright Building and 80 Charlotte Street as our other two major projects’ costs are fixed. 

“This leaves approximately half of our four year capital expenditure with variable costs but we have assumed inflation in our estimates.”

The timetable at Charlotte Street has slipped again to completion in early 2019 “following delays in finishing other projects.”

Brookfield Multiplex is main contractor on the £207m job where stripping out work has just begun ahead of full demolition later this year.

 

Latest news

Ministers reassure house builders over million homes target

Builders report strong sales continuing despite Brexit
2 hours ago

Heathrow third runway decision on hold – official

Decision will not be taken until October at the very earliest
10 hours ago

Green light for Ferrybridge £360m power plant

Three-year construction programme to start this autumn creating 500 jobs
13 hours ago

Infrastructure cash key to avoiding Brexit hiatus

Civil engineers urge Government to hold nerve on infrastructure and avoid stop-start construction
21 hours ago

MPs slam smart motorway plans to lose hard shoulders

Transport committee calls for rethink on £6bn "All lane running" plans
13 hours ago

Morgan Sindall bags £39.5m Bournemouth Uni project

Contractor set for University’s Faculty of Health and Social Sciences building project
1 day ago

August start date for Tyneside triple decker roundabout

John Sisk and Lagan Construction JV will deliver innovative A19/A1058 junction upgrade
1 day ago

Mott to build case for Solihull transport hub

Plan for new transport hub to connect Birmingham International with HS2 station
13 hours ago

WSP concedes defeat in bid battle for Sweett

Currie & Brown prepares to deliver cost cutting plan at Sweett
13 hours ago

Costain boasts record order book at half-year

Tendering levels remain high across main infrastructure markets
14 hours ago

Plans lodged for Redrow/Wates Bicester garden town

Developers aims to build 1,500 homes in next 15 years
1 day ago

Green light for Laing O’Rourke Liverpool cancer hospital

Work to start in next few months on new Clatterbridge Cancer Centre
2 days ago

WSP hires Atkins director for Stockport bypass

Feasibility study for the A6-M60 relief road will be led by Nasar Malik
1 day ago

Construction alliance formed for light rail work

Places for Colas, Barhale, Thomas Vale and Auctus as Balfour Beatty misses out
2 days ago

Watkin Jones £100m east London student tower approved

Work to start on Stratford tower at the end of the year despite Brexit vote
2 days ago

Kier wants suppliers for £50m of work near Hereford

Meet the Buyer event this Thursday: Register now
2 days ago

G F Tomlinson scoops £15.9m Nottingham Uni job

Advanced manufacturing building will be constructed at the University's Jubilee Campus
2 days ago

Kier wins bid race for £25m Mackintosh restoration

Kier beats rivals with "extremely competitive" bid for fire-damaged building
2 days ago

Balfour Beatty chief’s wife buys £200,000 company shares

Quinn holding in construction group rises to 0.07%
3 days ago

Willmott Dixon abandons sale of support services arm

Contractor decides to keep division after bidders wanted to break-up maintenance operation
3 days ago

Firm fined £550,000 after two men fall to their deaths

Couple fell through Euston roadside hoarding into building site basement
3 days ago

Redrow reports buyers unbowed by Brexit

House builder expects strong year-end profits after completions rise 17% to nearly 5,000
3 days ago

HS2 phase one opening could be delayed a year

Spending watchdog warns HS2 timetable unrealistic despite good progress on procurement
3 days ago

Murphy finance chief becomes new Barhale CEO

Matthew Behan to lead contractor as new corporate structure established to broaden portfolio
3 days ago

£10,000 prize to cut roadwork disruption and delays

Amey and Staffordshire council seek smart digital solutions to roadwork traffic delays
3 days ago

Currie & Brown trumps WSP bid for Sweett Group

WSP raises prospect of a bid war as it tells Sweett shareholders to sit tight
3 days ago

Suppliers hit as HOC goes into administration

Redundancies at north London firm as subcontractors left in dark
4 days ago

Student digs developer shrugs off Brexit worries

Empiric confident EU vote will have limited impact on expanding sector
4 days ago

Brexit leaves Heathrow third runway in the air

Fears grow about the future of major infrastructure projects
4 days ago

Bid costs dent Hochtief UK profits

Operating margin drops to 0.7% as profit falls 45% to below £1m
4 days ago