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MIPIM 2017: the rush to find new markets for UK architecture

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FEATURE: The UK’s impending exit from the EU, coupled with fear of a future downturn, has triggered an increased urgency to find new international markets, write Richard Waite and Colin Marrs

In September, prime minister Theresa May outlined her vision of a post-Brexit Britain as a great global trading nation. ‘I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before,’ she said. 

There is no clearer indication of this renewed, international drive than central government’s decision to make a big hullabaloo of the nation’s talents and investment potential at the MIPIM property fair in Cannes.

Visitors to the global trade show will find the main Palais exhibition hall plastered with the government’s new slogan ‘Invest in Great’ on billboards usually reserved for consulting giants like Cushman and Wakefield.

More importantly, the British government will, for the first time, have its own pavilion, envisaged as a meeting place for investors and a shop window for senior ministers. 

Sat next to the London stand, the tent is effectively the flagship for the newly formed Department for International Trade (DIT), which took over the responsibilities of UK Trade & Investment (UKTI) in July, and will showcase the best of the nation’s finest architectural exporters.

The pavilion will house an impressive set of models of buildings from around the globe by, among others, Eric Parry Architects, Rogers Stirk Harbour + Partners (pictured above), WilkinsonEyre and Marks Barfield. 

It is surely no coincidence that the DIT has made this headline move – and committed to rolling out similar shows for the next two years – in the wake of the EU referendum.

 In 2015, British firms earned more than £430 million from overseas work

The DIT’s burgeoning interest in exporting UK talent also tallies with growing evidence the architecture profession is already seeking opportunities outside of the UK. 

Number of planning applications since january 2016

New research by the London Festival of Architecture (LFA) shows exports of architectural services are huge for the UK. In 2015, British firms earned more than £430 million from overseas work. Conversely foreign practices only made £31 million in fees on projects here. 

The recent decisions by Zaha Hadid Architects, Foster + Partners and Grimshaw to open offices in Dubai highlight a growing trend for launching new outposts to service foreign workloads. 

Research by construction data firm Glenigan suggests the impetus for this overseas growth could be a slowdown in the workload pipeline in the UK, particularly at the top end of the London housing market.

The company’s latest data shows that, in January, the value of private residential starts in the capital was 24 per cent down on the same month last year. Glenigan’s economics director, Allan Wilén, says the scale of money invested in this sector makes it the major contributing factor in a drop of 9 per cent across all sectors in the UK over the same period. 

Wilén points out that the capital is more exposed to Brexit fears than the rest of the UK – particularly worries about the future presence of financial institutions and inflows of labour to serve them. 

Data suggests that since the referendum, investment volumes in ‘safe haven’ Germany have overtaken the UK

But Glenigan’s figures also show a significant decline at a national level in the number of planning applications submitted for major housing and commercial schemes. 

In January 2017, there were 1,476 applications lodged for housing schemes with more than 10 units and non-residential projects with a construction value over £250,000.

This represents a drop of more than a 100 from January 2016 and a 25 per cent drop since June – the month of the Brexit vote.

2017.02.27 number of projects on hold

Whether the move by practices to look for more jobs abroad has been prompted solely by the EU referendum result is open to question. The LFA figures are from 2015, when it seemed almost impossible that UK voters would opt to leave Europe. Chris Brown, chief executive of developer Igloo Regeneration, says: ‘Very little is selling at the high value end because of increases in stamp duty.’

Meanwhile new data from agent Knight Frank suggests that since the referendum investment volumes in ‘safe haven’ Germany have overtaken the UK.

Yet LFA director Tamsie Thomson says that, long before the referendum, many London architects had begun taking measures to avoid putting all their eggs in one basket.

‘Practices had already got savvy to the fact that the best way of insulating your way from a downturn in any sector is through diversification,’ she says.

‘With a building by a London practice in virtually every major city in the world, there is a recognition of the quality of product offered by London practices.’

It’s a strategy that now seems particularly prescient. Broadway Malyan managing director Gary Whittle says: ‘While we feel we have a robust pipeline of work in the UK, there is no doubt that we have seen some market challenges at the beginning of 2017. But that is why we made a decision a long time ago to diversify our business.’

Lindsay Urquhart, founder of architecture recruitment Bespoke Careers, does not dispute Glenigan’s figures, saying anecdotal evidence suggests job opportunities in the capital for individual architects appear to be shrinking. 

The number of job seekers we introduced to practices abroad increased by 70 per cent in the last six months

Lindsay Urquhart, Bespoke Careers

‘The number of practices looking to hire in London in January and February of 2017 is less than it was this time last year,’ she says.

And there is concern that any future recovery may come too late to stem a growing exodus of staff. The combination of economic clouds in the UK and uncertainty over the future residency status of EU nationals based in the UK, is already spurring architects to look for opportunities abroad.

‘The number of job seekers we introduced to practices abroad increased by 70 per cent in the last six months compared with the previous six,’ Urquhart says. 

‘Australia is booming and, as salaries there are at an all-time high, it’s proving to be a very attractive proposition … We are also seeing lots of interest from people looking to move to the USA.’

AHR managing director Martin Wright admits the ‘pipeline of work in the UK is visibly shorter-term than it was pre-Brexit’, but maintains there are opportunities outside the capital. 

‘We are finding that more developers are looking at the regions and that international money and investment in particular is moving towards major cities such as Manchester, Birmingham and Leeds,’ he says.

And those cities will all be flying their flags at MIPIM along with regions from the rest of the UK.

If MIPIM is a bellwether for the international property markets and the direction of global travel for the architectural profession, then one statistic cannot be ignored.

This year’s event organisers expect around 2,000 architects from around the world to turn up in search of the next big contract. 

In 2010 it was just 587.

Comments

Catherine Reading, director, Malcolm Reading Consultants
Architects have terrific mental fitness – essential to stay creative when on demanding projects – and looking globally for new opportunities is the next level of workout.

Our recent experience of clients in Taiwan, India and Australia is that these countries are immensely appreciative of UK skills and comfortable to go international for talent; and perhaps they now sense that Brexit gives them a look in…

For smaller practices there is a promising route in that many of the support professions that architects rely on, such as engineering and cost management, are global and this collaborative network offers smaller firms a realistic way to offset risk and focus on their creative value to clients .

Gerard Daws, director and co-founder of Plan A Consultants
We have not seen a slowdown but we have a spread of projects across different sectors and locations rather than just one particular sector such as commercial offices or healthcare. One or two projects have been put on hold but due to more mundane issues related to brief and budget not being reconciled at briefing stage. We expect these projects to kick off again and don’t conclude that they are related to Brexit or a slowdown. Projects in Europe and the Middle East are still holding up as well and one issue of interest is that more North American practices are now dipping their toes into the UK market.

’Projects in Europe and the Middle East are still holding up’

What is potentially exacerbating the situation however, and giving the impression of a slowdown is actually over-cautiousness. One thing that is quite clear is that clients and project managers are demanding greater cost/risk certainty earlier than the process allows or has historically required. This could be because Brexit or wider economic pressures are forcing funders to hold a tighter rein on their investments. This is manifesting itself in the need for increased design information and higher levels of resolution at RIBA stage 2 and even RIBA Stage 1. We have found that this is skewing the process and therefore progress on the larger projects.

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Readers' comments (1)

  • Is this a step change? Surely the best UK architects have competed across the world for years. The risks of work lost in the EU should be a concern, not new opportunities elsewhere. Nothing new there.

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