Fit outs on the rise
Whatever the clinical realities the country faces in what is being characterised as the end stage of the pandemic, 2021 ended with some very positive signs of recovery in parts of the construction industry. The London fit-out market in particular is rebounding strongly in 2022, according to a survey from the Cost consultancy team at Colliers, a leading firm in real estate services and investment management.
Demand for office space and interest in new leases have both been growing, with the result that partial refurbishments and complete fit outs have returned to pre-pandemic levels. Many of the companies who contributed to the survey say they are operating at 85 per cent capacity, while some claim even higher figures and order books for the year are already well on the way to filling up.
The director of Cost Consultancy, Colin Wood, commented: "We're seeing there's plenty of reason for optimism in the market. The majority of leasing requirements are from occupiers with lease events coming up or within premises due for redevelopment. Of the leasing that has happened this year, 61 per cent has been to grade A stock, a significant increase on the ten-year average of 44 per cent".
The real challenge to this growth is the ability of contractors to deliver projects profitably and on time. Some costs have increased by 25 per cent in the past year, while in some cases the increase is a staggering 120 per cent. Quotes for fit out works are being held for no more than about 30 days before the risk of losses becomes critical, so it is those who can execute fit out contracts swiftly who will have the advantage.
Wood said: "With all these pressures on demand and supply, both general contractors and trade contractors are becoming more selective over the projects they bid for. This means that occupiers are having to work harder to secure the right supply chain for their office fit out needs. Those with projects with onerous contractual terms or unrealistic programmes will find it much more difficult to secure competitive bids."
However compared to the last two years, these are comparatively happy problems for the industry.
Remediation at Oval Village
One of the most innovative and exciting regeneration schemes currently underway is the construction within a former gasworks of a stylish inner-London village next to the Oval cricket ground. Keltbray has been awarded the remediation contract by the owners, Berkeley Group.
Gasholder No 1 has been an iconic feature of the south London cityscape since it was built almost 150 years ago. Structures of this kind, once called gasometers, were a very familiar sight all over the UK for decades. However after the discovery of natural gas in the North Sea they slowly became redundant, replaced by high pressure pipe systems. For many years the National Grid has been turning over these sites to developers and local communities for repurposing as housing and leisure facilities. Oval Village enjoys a high profile because of its proximity to the home of Surrey County Cricket Club.
The gaswork's metal structure has listed status, so the village is being constructed inside it. Specialist preparation of the site is essential before building can begin, which entails bulk excavation and demolition of the gasholder wall, material processing and re-use, offsite disposal, metalwork refurbishment and extensive environmental monitoring and soil decontamination.
Keltbray's Peter Howland, MD for remediation said: "Keltbray is pleased to have won this package of works on this innovative regeneration scheme to support the transformation of Oval into an exciting village-like destination in the heart of Central London. The delivery of new homes embedded within stylish, integrated lifestyle-based facilities will not only have significant social and economic benefits for the local community, but also the country as a whole as we work to address the UK's chronic housing shortage."