Upturn in Planning Approvals Bodes Well for Future Work Opportunities
Posted by Glenigan on 17th May 2023 -
A 29% upturn in planning approvals in January-March compared to the same period last year, provides positive news for the industry’s future work pipeline.
According to the latest Glenigan Construction Review, planning approvals for industrial, office, hotel & leisure and major health projects were particularly strong.
In all, detailed planning approval was given for new construction projects worth an average of £12,425 million in each of the first three months of this year. Major projects (worth over £100 million) fared particularly well in the first quarter; up 122% on the period last year and helped by some major one-off schemes.
Developers’ confidence remains intact
But given the mixed economic outlook and the rise in interest rates, approvals for underlying projects (worth under £100 million) held up relatively well. Detailed planning approvals for underlying projects averaged £6,245 million per month in the first quarter – down by only 3% on the previous three months and just 8% lower than the period a year ago - and suggesting that developers’ medium, and longer term, confidence in their markets has remained largely intact.
One promising sector seeing an upturn in planning approvals is smaller and medium-sized industrial buildings. Although businesses’ appetite for large, ‘big shed’ units has weakened, developers see good opportunities for smaller warehousing/logistics schemes, often in urban areas. Underlying industrial project approvals were worth £2,840 million in the first quarter, up 37% on the previous three months and 9% higher than a year ago. Most UK regions saw an upturn in industrial planning approvals, with Yorkshire & the Humber, the West Midlands and the South East among the busier areas.
The new work pipeline in the office sector also strengthened in the first quarter. Detailed planning approvals for offices were worth over £3.5 billion, more than double in the period a year ago. The numbers were boosted by approval for some major projects in London and the South East – notably the £350 million Link Park Heathrow Data Centre (pictured) (Project ID 20289877) and the £800 million Pinewood Studios Screen Hub in Bucks (Project ID 2036881).
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