LONDON — The UK’s largest regional cities are seeing near-record levels of construction activity as developers invest heavily in commercial and residential real estate, according to an annual review by Deloitte.
The consultancy firm’s “Real Estate Crane Survey” monitors construction activity in Birmingham, Manchester, Leeds, and Belfast. According to the report’s authors, there has been a sharp uptick in urban development across a range of sectors including offices, hotels, flats, shops, and student housing.
Britain’s construction sector was hit particularly hard by the 2008 financial crisis, resulting in years of contracting or flatlining growth and the loss of over 100,000 UK jobs.
Many economists predicted that the UK’s construction sector would plummet after the Brexit vote, but investor confidence appears to have defied forecasts to remain buoyant.
Birmingham, England’s second-most populous city, saw a surge of activity which included a 10-fold increase in residential schemes starting construction last year, totalling over 2,000 units in the city centre. There is also 1.4 million sq. ft. of office space under construction, a 50% increase on the previous year — representing the highest level of activity in the city since the report was first published in 2002.
Manchester’s, England’s “northern powerhouse,” saw 22 residential projects breaking ground last year — eight more than the previous high of 14 in 2007. Leeds, in Yorkshire, saw the highest level of office space delivered to market for 10 years, and Belfast saw a healthy 19 schemes under construction, with 11 schemes completing in 2016.
Edward Bray, a Deloitte partner in Birmingham, said the uptick was partly the result of investment in infrastructure and transport.
“Improvements in transport links and major infrastructure works have opened up new development opportunities in areas that would have been considered peripheral just a few years ago,” he said.
Simon Bedford, local government development partner at Deloitte Real Estate, said: “The results of our four crane surveys reflect the growth and resurgence in the regions, breaking records set more than a decade ago.”
“Sentiment towards city centre development is buoyant with residential rising to new levels, quite literally in Manchester, with the addition of towers that will alter the city skyline.”
“All sectors are active and we conclude that our regional cities are delivering growth and investment at levels not witnessed for many years,” he added.
Business Insider Emails & Alerts
Site highlights each day to your inbox.