Strong growth projected for London construction in 2024

London stands out as easily the strongest market in the country for contractors on the lookout for new orders in 2024.

The January 2024 issue of the Glenigan Construction Review shows that London saw a 29% increase in the value of project starts in the fourth quarter compared to the previous three months even if they have yet to match the level of a year earlier.

A series of large private apartment and Build-to-Rent projects around the city and the capital’s busy office construction and hotel & leisure sectors are buoying up private building activity.

New private housing emerges as the star performer in the capital. London accounted for over a fifth of all residential projects started in the country in the fourth quarter with work getting underway worth £2.2 billion, up 18% on a year previously.

The outlook for work on housing projects in the capital is also looking healthy. London accounted for 22% of all detailed planning approvals in the housing sector nationally in the fourth quarter, worth £4.1 billion in total.

Build-to-Rent projects drive activity

Glenigan data highlights numerous major Build-to-Rent projects that are driving new private residential activity across the city. For example, detailed plans have been granted and work is due to start early this summer on the £180 million Stratford Centre & Yards Development involving 439 BtR flats along with hotel and office space (Project ID: 13073746).

Meanwhile, in West London, detailed plans have been granted on a £24.75 million BtR scheme at Atlas Wharf in Ealing (pictured) involving 457 flats and commercial space with work set to start later this summer (Project ID: 21393739).

The momentum behind the upturn in London office construction – both new build and renovation – is also being maintained. The Glenigan Review shows that the value of office detailed planning approvals in the capital tripled in the fourth quarter – to £1.95 billion – compared to a year earlier and accounted for more than half of consents in the sector nationally.

Major schemes given the green light include Land Securities’ £500 million development at 55 Old Broad Street in the City where work is set to start in spring next year (Project ID: 23179273).

Promising R&D conversions

The conversion of London offices into research and development space for the life sciences sector is also a promising source of new contracts. Last month Oxford Properties Group appointed Wates as the main contractor on central London’s largest office-to-life sciences project; the conversion of the Grade-II listed Victoria House in Bloomsbury into a 300,000 sq ft, life sciences hub. Work is underway with the main phase due for completion this autumn (Project ID: 23075876).

The capital’s vibrant hotel and leisure sector – which accounted for almost a third of all planning approvals in the sector in the fourth quarter – is also set to create opportunities for contractors.

The work pipeline in the sector has received a recent boost with planning approval for the All England Lawn Tennis Club’s £200 million Wimbledon Park project where work is set to start early this year (Project ID: 18435678).

One hotel scheme in the City of London that received planning permission before Christmas is the £31 million Boundary House Hotel Development. It involves a 311-bed facility in a 14-storey building and work is set to start this spring and run for 19 months (Project ID: 21463050).

Meanwhile, the new work pipeline on hotels in the capital has been bolstered by a huge £450 million development at 380 Kensington High Street where detailed plans have been granted to extend and renovate the Hilton London Olympia. Work on the 25,632 sq m scheme is due to start in autumn this year and run for 31 months (Project ID: 23137089).

For full analysis of Q4 performance download the January 2024 Glenigan Construction Review now.