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UK's regions bounce back as construction activity grows

Birmingham, Manchester, Leeds, Edinburgh and Glasgow have all seen a rise in construction activity during the past year, a new study has revealed

The number of office, residential and student housing developments in the regions have all increased, according to a survey of the UK’s cranes carried out by Deloitte.

The research shows an 80 per cent increase in the number of new schemes starting during the past year.

The commercial sector has seen the largest rise in new construction, with eleven projects starting on site across the Birmingham, Manchester, Leeds, Edinburgh and Glasgow.

Despite this increased construction being set to produce more than 255,100m² of office space, the development pipeline still remains below that recorded at the peak of 2009.

Manchester has seen the largest surge in development. The survey recorded 19 new construction starts last year, including eight residential schemes delivering almost 1,000 city centre units.

Head of research at Deloitte Real Estate, Anthony Duggan, said: ‘Compared to the less than positive story last year, our regional research now illustrates a rise in development activity, matching the recent improvement in the UK economy. We have recorded construction increases in office space and student accommodation as demand for both continues to rise. Similarly city centre residential is beginning to appear back on the agenda with a number of schemes breaking ground.’

He added: ‘The thrust of development activity this year sits with Manchester, Edinburgh and Glasgow, but the results are generally good news across the board with four out of five cities showing an increase in new starts compared to just one city in 2012. Residential development has seen a two fold increase with 1,400 units under construction, although this is still comparatively weak compared to the height of the market. Sentiment is certainly returning amongst home buyers and residential developers, with the help of government backed initiatives.

This increase in construction is unlikely to be a one-off

‘This increase in construction is unlikely to be a one-off.  With an improving residential demand, supply shortages appearing in a number of the commercial property sectors and signs of increasing activity from investors in regional commercial real estate. It looks like we will see more development activity over the next 12 months.’

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