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Talking Point - Pockets of intense activity
I return from my summer holiday to a full in-tray and new proposals to write. Despite all the doom and gloom, there is a hope of optimism that we’re another step closer to the end of the property industry’s difficult times.
All is not lost and there is hope for the industry. We are involved in pockets of intense activity in certain key areas such as hotels, student accommodation, further education facilities (themselves subject to funding hiatus last year), care and nursing homes and of course, food retail and its supply chain. They all share the common goals of good location, quality and value for money. Activity in infrastructure, recycling and sustainability are also apparent and appear to be gaining momentum.
Now is a time for taking advantage and capitalising on the few positives which the economic climate has uncovered. There are fantastic deals to be done with commercial space which will generate churn and migration, and also the resultant fit out and refurbishment work. Couple this with businesses retaining their bases rather than relocating and things don’t appear to be so dire.
To put things into further perspective, you may notice main contractors and their key subcontractors honing their pricing to levels not seen for years. This will feed into prospective individual project business cases. The Royal Institution of Chartered Surveyors Tender Price Index shows prices at levels similar to early 2004, albeit after this fall a predicted rise in 2011 of about 2 per cent and a steady increase from there on.
A side effect of driving construction costs down has given us more of an edge within Europe, as the UK has historically been a risky and expensive place to develop and build. It therefore makes the Midlands an ideal value for money zone packed with the expertise to deliver.
Clients are rethinking and looking very hard at their existing properties and portfolios to make sure they are getting the best from their assets - running costs, maintenance and smarter use of space are all high on agendas.
It is becoming apparent that this could be a window of opportunity allowing us to capitalise on the market and gain a very competitive price and excellent contractor to do the work. When looking into the future, I see fantastic opportunities for the city on the not too distant horizon, with the New Street station development being only one.
In my bag for the new term, along with my newly sharpened pencils, I will have a magnifying glass and a pair of binoculars - the first to see clearly the glimmers of light beneath the gloom and the other to keep an eye on the opportunities coming over the horizon.
Rob Kennedy is director of the Birmingham office of MDA Consulting.
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