In construction’s current competitive climate, talk of new activity and large-scale development is what everyone is listening out for. British Land’s head of development, Nigel Webb, certainly has something to say.

If there is one client to get in with right now, it has to be British Land. The developer is one of the few with plans to kick-start activity in London over the coming months on a really large scale - in fact, it recently committed to a colossal £1.5bn development pipeline up until 2014. As Nigel Webb, the firm’s director of developments, puts it: “We have just pushed the button on one of the biggest development programmes London has seen in recent times.” And - the really good news - pretty much all of that work is still up for grabs.

The new programme will create 2.1 million ft2 of commercial space in London over the next three years. It’s a bit of a leap given the blue-chip client has been one of the quietest of the major London developers since the recession hit two years ago. But with construction work now due to kick off this year on several sites and major projects in the pipeline - including the £290m Leadenhall (“Cheesegrater”) Tower in the City and the recently announced £40m Marble Arch House development in the West End - it’s clear that this sleeping giant has woken up with a start, and is now raring to go.

It goes without saying that the surge of activity has the potential to be extremely lucrative for the construction industry, especially as attention turns from the public to the private sector. Sitting in British Land’s Marble Arch headquarters, with a rare 40 minute slot free in his diary, Webb reveals the thinking behind such a bold development strategy and exactly how firms can get in on the action.

The time is now

After a rocky couple of years in the private sector, British Land’s finances are looking as healthy as can be expected moving into 2011. Pre-tax profit stands at £249m, down £19m on the previous year due to disposals taken to “rebalance the portfolio”. But Webb says the group is in an excellent position now to take advantage of what he describes as a “particularly interesting dynamic” in the central London market.

This dynamic comes from the combination of limited development in London over the last few years - something that looks likely to continue thanks to constraints on capital - and an increase in occupier demand. Webb goes on to explain: “In the past 12 months we have let something like 900,000 ft2 in recently completed developments. Then there is the fact that between 2012 and 2014 about 12 million ft2 of space will be subject to breaks and lease expirations in the City - a hangover from the eighties where lots of large occupiers took on 20 and 25 year leases. A fair percentage of those will now be looking for new accommodation and there will be very few players with access to capital combined with the development skills that are required to make the most out of this opportunity.” Luckily for British Land, it happens to be one of the few.

What’s in the pipeline?

Webb is wary of giving too much information on future schemes away: “This is the beginning of the road and there will be a number of new initiatives,” he says. But he is clearly chuffed to have done a deal on Marble Arch House. “There are very few opportunities in the West End to deliver new space, so it was an eagerly fought competition to win those development rights. It followed on from a deal we did earlier in the year when we bought 10 Portman Square. The combination of those two schemes have got people talking.”

Committed projects include a 500,000 ft2 North-east Quadrant in Regent’s Place, a mixed use scheme, 2-14 Baker Street - a 139,00 ft2 office space due for completion in February 2013, 95-99 Baker Street, due for completion in 2010 and 5 Broadgate, a new 700,000 ft2 office building with construction expected to start this year, due for completion by 2014.

We have access to significant funds for further developments over the next few years, in the order of £3bn to spend if we wanted to

Nigel Webb, British Land

How to win the work

Thanks to the start of what Webb describes as “a new cycle of development”, there are plenty of opportunities for new firms to get in on the action. “We have the £1.5bn development pipeline but we also have access to significant funds for further developments over the next few years, which in turn opens up new opportunities for new suppliers,” says Webb. “We have something in the order of £3bn to spend if we wanted to.”

There may be plenty of money available, but with so few clients in a position to develop at the moment, and with firms desperate for work, there’s no doubt that competition will be fierce. Webb explains what construction companies could do to make sure they are at the top of the pile.

“We do not go to the market looking for the lowest price. There are other factors to consider. One could be tempted to build construction cheaper because of competition in the constrained market, but it’s really quality that’s the most important thing.” He adds that, like most successful developers, British Land wants a supply chain that can bring ideas to the table to add value.

British Land is well known for working with big name contractors including Balfour Beatty, Bovis Lend Lease, Laing O’Rourke, Mace, Skanska and Sir Robert McAlpine. But Webb says that this doesn’t mean the developer isn’t open to new supply chain members and the firm has no set framework of contractors or consultants.

Another prerequisite for being in with a chance of winning work with British Land is having past experience working on large projects: “We would want new supply chain members to have delivered the scale of projects that we’re working on at the moment and understand the complexities involved.”

A client’s world?

A major industry concern over the past few months has been that with many firms fighting tooth and nail for a limited pool of work, it’s a client’s world out there. So will British Land be toughening up and asking even more from their supply chain? “We’re always expecting more from contractors and consultants because we constantly want to improve the way we do things,” says Webb. “I don’t think we’ll be changing the way we procure our works but we are always pushing our supply chain to be better.”

On that note, are there any improvements he would like to see the industry addressing? “One of the positives of the recession is that it has given everyone some time to reflect on how we can be more efficient,” he says. “I think there needs to be more focus on what the occupiers want and how we deliver that without over specifying buildings. We spend a huge amount of time working with occupiers to find out what it is they want from us and the industry - I think the marketplace generally could be better at that, do it more and make sure that they are meeting those needs as economically as possible.”

A message for the future

When asked what his message for the industry would be, Webb takes a deep breath: “Gosh - that’s a difficult question,” he laughs. “I guess it would be that we need to change the way we design and procure buildings to become more efficient and more responsive. We’re not just building buildings for today, but for trends five, 10, 15 years down the line. Young people today are all about social networking, so we are more focused on open plan work space, break out areas, wireless technology facilities. Technology continues to evolve at a rapid rate. And buildings have to try, within reason, to do the same.”

And with 2.1m ft2 of office space to deliver over the next three years, there will be plenty of opportunities for Webb and the construction companies he chooses to work with, to show everyone how it’s done.

British Land in numbers
£8.9bn - real estate portfolio value
£2.9bn - office portfolio value
£5.7bn - retail portfolio value
2.1m ft2 - committed office developments
1.4m ft2 - committed retail developments
8m ft2 - developments