A report by Rider Levett Bucknall (RLB) has revealed that, despite some market hesitancy, developers are showing significant interest in upgrading and repurposing buildings.
RLB’s Construction Market Intelligence report for Q4 2023 notes hesitancy due to macro-economic factors and cost inflation, but also reports demand for acquiring buildings for either improving or changing use.
The construction and property cost consultancy, whose Thames Valley office is at Winnersh Triangle, has now set out its tender price inflation forecast to +3.50 per cent for 2023 and +2.75 per cent for 2024 and 2025 respectively which, it says, reflects growth in the life sciences sector, notably at its Oxford and Cambridge hotspots.
The report says other sectors in the South East seeing activity include the commercial sector, such as the Station Hill scheme in Reading, and several residential-led town centre regeneration schemes.
There are also project opportunities linked to nationwide programmes of work in the renewable, energy and nuclear sectors, as well as capital investment plans in higher educational estates and Build-to-Rent and Private Rented Sector schemes in outer London commuter locations.
Mike Righton, Thames Valley managing partner (pictured), said: “There is no doubt that the uncertainty within the market has continued to cause some caution in terms of viability of projects although we now predict a more moderate and stable period of construction tender price inflation over the next few years, particularly compared to the volatility and pricing pressures recently experienced across the UK construction market generally.
“In the Thames Valley we continue to see the demand for lab-style projects with the growth of the life sciences sector, including the recent 28-acre life sciences campus, Riverlabs in Hertfordshire, where the RLB team provided cost management services.
“This project, like many others that are being presently green-lighted, encompasses one of the main drivers of activity within the industry – sustainability – with a 75 per cent reduction in carbon.”
The report can be seen at https://rlb.foleon.com/reports/construction-market-intelligence-tpf-q4-2023/
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