Project starts decreased compared to both the previous quarter and the previous year. Positively, detailed planning approvals increased year-on-year and quarter-on-quarter, bolstering the development pipeline.
Offices overview
Office work starting on site totalled £1.149bn during the three months to August, a 47 per cent decline compared with the preceding quarter, and 42 per cent down on the previous year. Major projects (worth £100m or more) decreased 75 per cent against the previous quarter and 66 per cent on a year ago, totalling £250m. Underlying starts (less than £100m in value) fell 15 per cent against the preceding three months on a seasonally adjusted (SA) basis and were 27 per cent lower than a year ago, totalling £899m.
Office main contract awards totalled £1.987bn, a 9 per cent decrease against the preceding three months but 12 per cent up on the previous year. Major projects totalled £1.347bn during the period, a 12 per cent decrease against the preceding three months and a 196 per cent increase on the previous year. Underlying contract awards declined 7 per cent against the preceding three months (SA) and by 51 per cent against the previous year to total £640m.
Office detailed planning approvals totalled £3.378bn, growing 1 per cent on the preceding three months and 13 per cent against last year. Major project approvals were 12 per cent up against the preceding three months and increased 22 per cent on a year ago, totalling £2.288bn. Underlying project approvals were 7 per cent down (SA) against the previous quarter and decreased 3 per cent on a year ago, totalling £1.090bn.
Size of office projects
Starts in the ‘Over £100m’ value band decreased 66 per cent year-on-year to £250m. Project starts in the ‘£20m to £50m’ value band fell 17 per cent year-on-year, totalling £239m. The ‘£50m to £100m’ value band slipped back 58 per cent year-on-year to £159m. Starts in the ‘£10m to £20m’ value band fell 59 per cent year-on-year, totalling £116m.
In contrast, the ‘Up to £5m’ value band increased 24 per cent year-on-year to £214m. Project starts in the ‘£5m to £10m’ value band jumped 51 per cent year-on-year to £171m.
Regional
London was the most active area of the UK for office starts, accounting for 44 per cent of the total value during the three months to August, despite a 53 per cent decrease compared with the previous year’s levels. Office work starting in the Capital totalled £510m. Further decline was prevented by the £150m Lansdowne House Redevelopment. The East of England also experienced a 77 per cent slump on a year ago. The value of projects starting on site in the region added up to £81m, accounting for 7 per cent of the office sector.
In contrast, at £187m, the North West experienced a strong performance, with starts having grown 32 per cent on last year’s levels, to account for 16 per cent of the sector. Accounting for 13 per cent, the South East increased 53 per cent on a year ago to total £150m.
Scotland had the largest share of detailed planning approvals (26 per cent), with a total value of £894m, with the value having jumped more than 18 times on last year’s figures. The growth in the region was accelerated by the £850m Buchanan Galleries project in Glasgow. The North East grew almost 14 times to total £584m, a 17 per cent share of office consents.
Accounting for a 9 per cent share of approvals, Wales increased 164 per cent on a year ago to total £305m. In contrast, accounting for a 23 per cent share at £781m, London slipped back 60 per cent against last year. Totalling £200m, the East of England fell 14 per cent against the previous year to account for a 6 per cent share of consents.
