Belfast, Birmingham, Leeds and Manchester have defied market challenges after delivering nearly 2.5 million sq ft of office space in 2020, a rise of over 547,000 sq ft more than 2019, according to Deloitte’s Regional Crane Survey.
The Crane Survey, which monitors construction activity across a range of sectors including offices, residential, hotels, retail, education and student housing, shows that a further 3.61 million sq ft of office space is currently under construction across the quartet of cities. Residential delivery increased nearly 67%, rising by 3,290 to 8,197 new homes completed in 2020. A further 18,912 residential properties are currently under development in the four cities.
The cities have delivered 5,405 student bed spaces in city centres, with a further 3,485 in development as universities and private student accommodation providers continue to invest in both teaching accommodation and student housing.
Simon Bedford, partner and regional head at Deloitte Real Estate, commented: “Regional office construction was strong in 2020, despite some delays in construction caused by lockdowns. The office pipeline has softened somewhat, as developers take a ‘wait and see’ approach to future demand.”
Deloitte’s research indicates the shift to home-working could change how businesses use office space in the future, which, in turn, could influence how local residential areas are used. This could potentially shape the role of neighbourhood set-ups to create more diversity within local centres.
Bedford said: “Our latest CFO survey showed that home-working is predicted to increase five-fold by 2025. The role of the office could flex to meet shifting demands for collaborative and creative space, as organisations revaluate their needs.
“Looking at residential, there’s a major focus for new developments to provide outdoor space and community facilities. This reflects a growing trend towards small-scale retail and leisure offerings as part of wider mixed-use developments, helping to create neighbourhoods and foster a sense of community. In turn, this could have a positive knock-on effect for the high street. For example, our future of the high street research suggests an increased focus on localism and a greater level of commitment to small independent businesses that can easily identify the origin of their goods. Therefore, all things considered, 2020 will be one of the stronger years in overall terms and points towards the ongoing renaissance of our major UK cities.”
Daniel Barlow, managing partner for regional markets at Deloitte, added: “There are real signs of recovery and resilience across the UK, and it’s incumbent on us all to maintain momentum to ensure that all cities, towns and villages level up.”