Encouraging signs for East of England construction

Image Source: Chetwoods architects

One regional construction market showing encouraging signs of life in the first half of this year is the East of England. Stretching from the Norfolk coast to the London suburbs of Hertfordshire, the region has long-benefitted from the thriving science and tech-based cluster of businesses around Cambridge.

But other areas in the region are attracting new investment, notably Suffolk and in Essex, where the office market has picked up strongly. And in the long run, the East stands to gain from the planned £3.5 billion expressway linking Cambridge with Oxford.

Glenigan Construction data shows a marked upturn in the value of underlying planning approvals in the East of England in recent months, pointing to a promising new construction work pipeline in the region.

Overall, detailed planning approvals were worth £2.542 billion in the East in the six months to June, up 22% on the period a year ago. Compared to last year, marked increases were seen for planning approvals in the region for infrastructure (up more than three-fold), industrial (up 124%), offices (192%), hotel & leisure (60%) as well as education (+24%) and health (+31%).

Space under construction

Today, there is more than 530,000 sq ft of office and laboratory space under construction around Cambridge, according to Savills. Much of it is on business parks and is pre-let to larger established firms.

Major schemes are continuing to get the go-ahead around Cambridge. Glenigan Construction data shows that a £30.9 million contract has recently been let on Howard Group’s scheme to develop a business park at Unity Campus at Sawston near Cambridge. Morgan Sindall is the main contractor on the project, where construction work is set to start early next year for 13 months (Glenigan project id 17243638).

But there are opportunities for new construction work on smaller projects. Savills says that a quarter of property deals in the area involve office spaces of less than 10,000 sq ft, catering for the plethora of SMEs and tech starts up in Cambridge. There has also been an influx of serviced office providers looking for space and there is still a shortage of ‘grow-on space’ for SMEs seeking to expand from serviced office space.

The region’s growing economy is also buoying up prospects for housebuilders in the region. One developer, This Land, has recently acquired 20 new sites across Cambs as part of a plan to build over 560 new homes close to Cambridge. The firm plans a mix of urban and rural schemes and its sites include a mixed-use project at Soham Northern Gateway and one next to Hereward Hall in March.

Energy projects

In Suffolk, the region’s expanding offshore energy sector is a growing source of new construction projects. In Lowestoft, work is set to begin this month to build a new £25 million hub to support ScottishPower Renewables’ East Anglia ONE windfarm to be built off the East coast.

Meanwhile a strong office market in Essex in the first half of this year bodes well for new construction prospects. The county is increasingly seen as an alternative office location to London with good road and rail links, which should improve with the extension of Crossrail to Shenfield later this year.

A stronger occupational office market has seen record rents paid in Brentwood and Colchester this year according to Savills and £64 million has been invested in offices across the county, some 83 per cent above the total for 2017.