At the British Council of Shopping Centres conference this week, the talk was of the shortage of retail space and the need to start building fairly soon to meet demand in four years’ time
One thing we’re not short of at the moment is worries over money. According to our Tracker data on page 70 the summer’s minor bounce-back has ended. This means consultants’ fees are still falling like autumn leaves and contractors are starving themselves to keep cash flowing fast enough to stave off redundancies. Anxiety about public spending is only going to heighten as the general election approaches and even those areas where demand is still fairly strong, such as the university sector, are now looking shaky. So it would not be surprising if you’re not looking much further ahead than the date of your next interim payment.
But you know what: there is life after Labour’s public spending bonanza after all. For one thing, retail is looking up. True, just about every shopping centre development in the country has been mothballed. But at the British Council of Shopping Centres conference in Manchester this week, the talk was of the shortage of retail space this was going to lead to – and the need to start building fairly soon to meet demand in four or five years’ time. There was also agreement on the need for landlords to improve their asset management to keep tenants happy – which means more refurbishment work. And although many consumers are worried about their jobs, low mortgage rates have put more money in their pockets, and retailers have just had their best October trading figures for seven years.
The story is the same in the office sector. West End developer Great Portland Estates has announced plans for two schemes worth £165m near Oxford Street. One crocus doesn’t mean that spring has come, but it’s a start. Then there’s the fact that the investment market in commercial property is booming in some sectors, which gives us reason to hope that more office developments could be restarted sooner rather than later as the banks become more and more willing to lend money.
The government’s maddeningly hesitant approach to building nuclear power stations has finally been replaced by something more like panic as it suddenly hits home that the lights are going to go out if it doesn’t do something now. So, it has confirmed the sites for 10 plants and says it wants to see the first operational by 2017. Given the myriad complications and hurdles yet to overcome, 2018/19 is a more realistic timescale. Even so, it could amount to a £50bn programme of work over the next two decades. (The last thing we want now is for the new Infrastructure Planning Commission to be scrapped – as the Tories are threatening – slowing the whole planning process down again.) Then there’s the £17-a-year levy on electricity bills to pay for carbon capture and storage plants. There is some good news on port development, too: a statement released by the government yesterday says we should be planning for triple the capacity we have at the moment. For firms such as Kier, Balfour Beatty and Costain, which are all reporting healthy order books, it’s looking better and better.
Consultants can also allow themselves some cautious optimism about the future. Even if there’s no comprehensive deal at the Copenhagen climate change summit, there is a deepening conviction around the world that low-carbon design is necessary. Britain’s tough regulatory stance on energy-efficiency and renewable power has trained a generation of experts in just this skill, which means we’re in demand in developing countries. One of those is China, which looks likely to be a huge market, at least until it starts producing its own low carbon engineers.
And finally, what about those harassed firms at the smaller end? Any cheer for them? Well, for all the gross unfairness of it, those bonuses being paid to bankers do find their way into extensions and loft conversions …
Denise Chevin, editor