Upturn in private construction in the West Midlands

Construction in the West Midlands has seen an upturn in recent months. Construction on a series of major schemes to provide new industrial and commercial space around Birmingham and other major centres in the area is providing a promising source of work for the industry.

The latest Glenigan Index shows that the value of construction project starts in the West Midlands was up 16% in the three months to July on the period a year ago. Nationally, the value of project starts rose 4% on the same basis.

A growing demand for high quality office space has been one spur to new development in the region. Glenigan’s latest Construction Outlook – Forecast identifies Birmingham as one of the regional centres where a rising demand for office accommodation and a previous lack of development activity has tightened the supply of available space.

In response, the construction pipeline is growing. In the second quarter alone, planning approvals for new offices in the West Midlands were worth £132 million, higher than any other region in the country and accounting for almost of a fifth of the UK total for the period.

Prominent office schemes

One of the more prominent office schemes in the region where construction is due to start this autumn is the £60 million Business Hub at Eastside Locks in Birmingham. Detailed plans have been granted and bills called on the STEAMhouse Phase 2 of the project. It involves the alteration of the former Belmont Works and a new 5 storey building creating nearly 13,000 sq m of new commercial office and teaching/R&D space (Glenigan Project ID: 15349957).

Meanwhile, Legal & General UK Property Trust has submitted plans for a £15 million conversion of a former House of Fraser store at the Rackhams Building in Birmingham’s Corporation Street. Construction work on the scheme, involving nine floors of offices and a hotel and roof terrace, is due to start next spring and last for 12 months (Glenigan Project ID: 18426203).

Logistics development

The outlook for more logistics and warehousing development in the region is also healthy. A recent report on the logistics market in the West Midlands from Savills suggests that although demand from manufacturers had dampened, other sectors remain active and it expects a pick-up once Brexit uncertainty is lifted.

Take up of new logistics space in the region in the first half has been subdued but Savills says it is aware of multiple deals in the pipeline which are set to complete in coming months. In all, nine logistics/warehouse units are under construction in the West Midlands today, providing 1.71 million sq ft.

Construction work on the largest of these - Fradley Park in Staffordshire, where Evans Property Group is developing a £20 million, 400,000 sq ft speculative warehouse with office space - started in June, with completion set for early next year (Glenigan Project ID: 19237128).
Meanwhile tenders have recently been returned and construction work is set to start this autumn on the new £90 million Jaguar Land Rover Logistics Operations Centre in Solihull. The project will involve over 97,000 sq m new industrial space with work running over 24 months (Glenigan Project ID: 16450551).

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Logistics and warehouse construction keeps growing