Developer confidence high in big regional cities

Aaron Morby 1 year ago
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Developer confidence is running high across England’s three major cities despite the present economic headwinds.

City living projects in particular are feeding construction activity in Birmingham, Leeds and Manchester, according to the latest Deloitte Regional Crane Survey.

In 2022, the cities recorded sustained or increased levels of development activity across a range of sectors including offices, residential, hotels, retail, education, and student housing.

The survey raises hopes that momentum will continue in 2023 as developer confidence remains strong in the main regional cities.

John Cooper, partner in real assets advisory at Deloitte, said: “Developer confidence is a key indicator for economic health and, despite many market uncertainties over the last few years, construction in our surveyed UK regional cities remained remarkably resilient.”

Even the office sector which was slightly down on 2021 is showing signs of stirring back into life.

Cooper said: “We have seen office schemes return to planning as developers respond to the rapidly changing demands of occupiers who seek flexibility, high-quality amenities and a workspace that meets sustainable and wellbeing targets.

“We expect to see developers significantly pushing the boundaries of office design to not only meet the requirements of occupiers but to maximise the long-term adaptability potential and futureproof their investment.”

2022 Crane Survey


Birmingham:

43 projects underway compared to 34 in 2021 – an increase of almost a third. Of the 18 new schemes breaking ground, residential made up 13 projects totalling 6,487 units under construction, up 37% on 2021 (4,720).

In addition, a record-breaking 2,398 homes were delivered to market last year – the highest delivery of new homes recorded in the survey’s 20-year history. The survey also suggested Birmingham’s skyline is set to change as the demand for city centre homes continued and with schemes of 50-storeys or more in planning.

The development of office space in Birmingham bounced back and was up 40% from the previous survey, totalling nearly 867,000 sq ft under construction.

Manchester

25 new projects began construction in Manchester and Salford city centres in 2022, with residential schemes continuing to deliver high numbers of new homes. Over 2,700 homes were delivered to market last year. Despite this slight dip for the first time in seven years, there was no sign of slowdown with 17 new residential schemes breaking ground. Combined with developments on site from previous years, these are set to deliver over 11,750 new homes over the next three years.

There was also a record delivery of new hotel rooms in Manchester of over 1,500, with an additional 691 under construction. Office construction remained strong with 1.7 million sq ft being built, including an additional five new schemes comprising 1.1 million sq ft of new office space.

Leeds

22 new construction starts in 2022 – the second highest since the crane survey began in 2006. Student accommodation was a big driver of development activity with seven new starts bringing the total to a record-breaking 11 schemes currently under construction. These schemes are set to deliver 3,294 student bed spaces, recognising the significant investment by the city’s higher education institutions.

Eight residential schemes completed last year in Leeds delivering 1,390 homes to market, while five new schemes broke ground adding to the 3,226 homes under construction. The survey also recorded over 850,000 sq ft of office space under construction and two new office starts.

Cooper said: “While we expected some lag in delivery following a construction slowdown during peak pandemic, development activity across the cities remains positive and, in some cases, record-breaking.

“The residential sector is showing no signs of slowdown with large numbers of homes still in the development pipelines across the cities.”

 

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