New construction in the West Midlands gathers pace

The new HS2 Curzon Street Station

Birmingham may have missed out to Leeds when Channel 4 recently decided to locate its new regional hq in the Yorkshire city but the momentum behind the upturn in new construction work in the West Midlands is gathering pace.

The latest Glenigan Index showed that the West Midlands enjoyed easily the strongest performance of any UK region in October, with the value of underlying construction project starts up by 44%, compared to the month last year.

The region’s revival is being driven partly by healthy rises in the value of new project starts in offices, industrial, education and utilities work. The prospects for new work in the region are also promising, with a 9% rise in the value of detailed planning approvals in the first nine months of 2018, compared to the period last year.

HS2 boost to commercial sector

The prospect that HS2 will connect Birmingham to the capital in 49 minutes from 2026 appears to be boosting confidence in the city’s commercial office sector. Glenigan Construction data shows that the value of underlying office construction starts in the West Midlands rose more than three-fold (239%) to £266 million in the first nine months of 2018, compared to the period last year.

Key commercial construction projects underway in Birmingham include phase 2 of Hermes Investment Management’s £41.1 million Paradise Circus Queensway scheme, where 12 of the 13 storeys will involve new office space totalling almost 38,000 sq m. Tenders have recently been returned on the project which will start next summer and run for 40 months (project id. 16088711).

The tender pipeline for offices in the West Midlands has also picked up sharply with the value of detailed planning approvals more than doubling (up 183%) to £246 million in the first nine months of 2018, over the period last year.

Long term pipeline

Glenigan Construction data points to a healthy long term construction work pipeline around Birmingham. Invitations to tender are due to be made next Spring on the region’s flagship project, the new £435 million HS2 Curzon Street Station Development, designed by Grimshaw Architects (Glenigan Project ID: 17142804).

Other significant rail construction projects in the pipeline in the region include the 11.5 km, £200 million Midland Metro extension to Brierly Hill for the West Midlands Combined Authority. Civil contractor Midland Metro Alliance is set to start work next September on the project which will run for 48 months (Glenigan Project ID: 03181631).

The industrial sector in the West Midlands is also being buoyed up by healthy demand for warehouse and distribution space. One significant project where detailed plans have been granted and which is at the pre-tender stage is the £35 million industrial Prologis Park Fradley Park phase 2 in Lichfield in Staffs. Work is set to start next Spring on the 8.26 hectare site and run for 70 months (Glenigan Project ID: 17040561).

Education is proving another strong market for contractors in the West Midlands, where the value of construction project starts in the region is up 69% in the first nine months of 2018, compared to the period last year. Contractors are currently being invited to register their interest for phase 1 of a new £40 million extension to Birmingham University’s molecular science research hub, with work set to start next Spring and run for a year (Glenigan Project ID: 18143111).