Strong increase in commercial property new builds for 2015

Q1 outperformed same quarter in 2014 according to JLL & Glenigan’s Construction Index.

JLL and Glenigan’s newly published Commercial Construction Index, Q1 saw a strong start to the year for non-residential construction, with new builds and existing projects rising by 7.9 percent over the first three months. The report also reveals that the retail and hotel sectors have been very buoyant but emphasises that the medical sector was the only one to see projects slowing down.

Helen Gough, lead director of JLL’s Buildings and Construction team, said:

“One issue raised by our research has been a shortage of ‘trades’ including bricklayers, electricians and demolition contractors, meaning that some potential new build projects, particularly in London, are being shelved. Contractors are therefore being increasingly cautious about the jobs they are going for.”

The report highlights that elsewhere in the UK there is appetite for new builds. Allan Wilén, economics director at Glenigan, added:

“£14.9 billion pounds was spent in the 12 months to 2015 Q1 on new building starts including offices, retail stores and schools. Last year for the whole of 2014 it was £12.8 billion. Refurbishments and extension projects have declined slightly.”

According to JLL and Glenigan’s Commercial Construction Index, new building increased most in Yorkshire & the Humber (30.6 percent) during Q1, boosted by the Hammerson’s Victoria Gate scheme in Leeds. In Scotland building is up ( 28.1 percent), Wales (24.4 percent) and the East Midlands (24.2 percent), Greater South East (London, the South East and the East of England) saw volume rise 7.3 percent from £11.2 billion to £12.0 billion, Construction has fallen back in the North West (-14.2 percent) and the West Midlands (-9.2 percent).