London is a rare area of growth, says Brian Moone, and the projects coming back on line include large and complex towers. Developers and suppliers had better plan early to avoid logjams
The UK construction industry is still adversely affected by the ongoing economic difficulties in the eurozone and in the wider global economy. However, in a movement against this trend, recent reports in the financial press reveal that during the past 18 months London has attracted a high proportion of the investment into Europe and that this is going into property development.
As a result the industry is beginning to experience individual pockets of growth in the form of major projects in and around London as major developers begin to reinvest in their property portfolio. There are already a number of major projects that have started and several others that are coming on stream over the next couple of years. While this is good news for the industry and for London, years of severe economic conditions have meant that those working within the construction industry have significantly reduced their capacity. This may cause a problem in delivering major projects.
A Spotlight article written before the recession looked at the effect of high-rise construction on lead times. At that time, lead times were already long and the potential was for even further increase. This article looks at the same issue but from a very different economic starting point: lead times remain at their lowest for a decade. However, there has been a reduction in industry capacity due to the recession, which is leading to potential bottlenecks and longer lead times as these new projects come on stream.
Some of the first major projects are the ones that were shelved at the start of the recession around late 2007 and early 2008. Many of these were fully developed proposals when they were stopped, so they are able to hit the construction marketplace quickly. These projects include Leadenhall, otherwise known as the Cheesegrater, a 47-storey tower; Bishopsgate Tower, known as the Pinnacle, a 64-storey tower, and 20 Fenchurch Street, better known as the Walkie Talkie, at 37 storeys.
These new projects are in addition to existing projects that are in the midst of construction, like the Shard and its adjoining building, the Place. As well as these towers there are other significant projects including the development of the old Middlesex University site with the project formerly known as NoHo Square; Park House on Oxford Street; and 5 Broadgate. The speed with which some of these projects are coming to market and their size and complexity will challenge the industry’s ability to provide the capacity necessary to meet timescales and deadlines.
These major schemes involve a number of key trade packages of a size or complexity that only a few specialist contractors have the capacity or capability to deliver. For example, the capacity to deliver major steel frame construction is currently shared between Severfield Rowen group and William Hare. This was recently highlighted when Bourne Steel and Billington joined forces to create BS2 to provide the potential for an alternative supplier in the market. There has already been a slight rise in steel frame lead times, and these could increase by up to 20%.
Another critical package in these tower projects is vertical transportation; the passenger and goods lift installations are becoming more sophisticated and specialised in their technical controls, lifting mechanisms and finishes, and again there is only a handful of lift companies that have the capability and capacity to manufacture and install lifts that meet these major projects’ requirements. Already there has been an instance where a lift manufacturer has had to consider whether it has sufficient capacity to take on a project as far ahead as 2013 due to existing planned commitments.
Cladding contracting has been a typically volatile sector in the past, with a number of companies going into administration and the few players who remain being predominantly European. Again, once packages get over a certain size or complexity there are only a few contractors that can handle the projects.
Curtain wall contractors are forceasting that, if they secure these projects, they will exceed their installation capacity in the first half of 2013. Based on previous data this could mean lead times increasing from the current level by 30%.
Concrete is another area in which capacity could become a problem where there are large complex pours. Also, the capability to undertake large slip or jump form construction to high tolerance is a specialism that limits the supply of contractors further.
Finally, although not a major package, the complexity involved in many of the large tower buildings is leading to more complex building maintenance units or cradles. There are only two or three companies that can handle this very specialist work.
The solution recommended by most of these contractors lies in the early engagement of the specialists. This will enable them to advise their clients on how the work may be sequenced to level capacity and avoid any peaks which could lead to delays and to ensure they have the opportunity to upscale their capacity to provide and manage the increased workload.