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April 28, 2020

Legal and General signs £150m Sheffield City centre regeneration

Legal & General announces that it is investing £150m into Sheffield’s West Bar Square development to deliver the first phase of this substantial mixed-use project in partnership with Developer Urbo and Sheffield City Council, as it continues to invest for the long-term, supporting the UK’s post crisis economic growth prospects, jobs and housing needs.

The development will comprise 200,000 sq. ft. of Grade A office space, 350 ‘Build To Rent’ homes, a multi-storey car park and high quality landscaped public spaces. The first phase will deliver large footprint, modern office space, currently lacking within Sheffield’s property market, and is expected to accommodate up to 1,800 workers.

To bring forward the scheme, Legal & General has partnered with Sheffield City Council and Urbo (West Bar) Ltd – a joint venture between Urbo Regeneration and Peveril Securities (the development arm of the Bowmer and Kirkland Group).

Legal & General has invested billions of pounds into urban regeneration projects across the UK. This includes partnerships with Local Authorities in Cardiff, Salford, Newcastle and Sunderland, as well as central government bodies such as Homes England and world leading universities. Legal & General is using its varied capital streams, from start-up funding to long term UK pension money, to reshape the urban landscape; providing the significant investment needed to help cities adapt, change and innovate.

Legal & General is committed to investing in Sheffield, where it recognises the high potential the city has to offer, and to supporting its post-crisis growth ambitions, meeting its need for regeneration, housing and job creation.

Nigel Wilson, CEO of Legal & General, said: “There has never been a more important time to invest in our regional cities. Legal & General is in a unique position to support the UK economic recovery by recycling hard earned savings and pensions into real assets which promote job creation – through construction to office occupation – and create landmark master plans which incorporate grade A office space, a variety of housing and high quality public space.

This is not new territory for L&G. Our investment partnerships in cities such as Cardiff and Newcastle are already delivering at pace. Likewise our vision for West Bar Square is to deliver a much needed new quarter for the centre of Sheffield. During these unprecedented times, it is absolutely imperative that institutions continue to push forward with deals such as these, so we can position the UK for an accelerated recovery and lay the groundwork to support those most in need in society.”

Peter Swallow, managing director of Urbo Regeneration said: “This is a massively significant investment for Sheffield, and is a vote of confidence in the future of the City as a whole, particularly during the current climate. The funding partnership we have agreed with Legal and General will guarantee delivery of large scale regeneration in this important part of the City, linking the rapidly expanding Kelham Island district to the City Centre.”

Ralph Jones, managing director of Peveril Securities and main board director of Bowmer & Kirkland, said: “We are delighted to enter into this exciting partnership as we look to support regional cities in emerging strongly post-crisis. We are already working with Legal & General on a similar major Government Hub office scheme in the Midlands and now they will also help us to deliver this market-leading development in Sheffield.”

Councillor Mazher Iqbal, Sheffield City Council cabinet member for business and investment, said: “Although I recognise it may not be at the forefront of everyone’s minds in these difficult and challenging times, it is really important that we don’t forget to invest in the future of our city and continue to support developments for when Sheffield emerges from the Covid-19 pandemic.

“This is fantastic news for the city going forward and yet another example of how we are attracting major new investment partners into the city. We are repeatedly being told that there is a shortage of new Grade A office space in the city centre which could have a negative impact on the local economy in terms of options for new or existing businesses to move and expand. As a Council we are helping to address this through making sensible targeted interventions in the market with partners. This development will create modern floorspace for thousands of jobs; hundreds of high quality new homes and improve neighbourhoods right in the heart of Sheffield. It will also provides attractive public spaces with sustainable urban drainage and better connectivity between the city centre and Kelham. It’s a huge project and Sheffield can’t wait for it to get started.”

Urbo has been working with Sheffield City Council for several years to bring forward the West Bar Square scheme, which enjoys a prominent position on the Inner Ring Road between the booming Kelham Island district and Sheffield’s Cathedral Quarter. West Bar Square was granted outline planning consent in 2017 and, in 2019, a Compulsory Purchase Order to complete assembly of site was confirmed. Detailed designs by leading architect 5plus will support the reserved matters planning applications for the first phases of development, which will be submitted in the summer.

The creation of West Bar Square will complement the neighbouring Riverside Business District which already boasts key office occupiers including the Home Office, top 50 law firm Irwin Mitchell and the Crown and Family Courts.

Further details of the West Bar Square development can be found at www.westbarsquare.com. Picture available on request.

April 23, 2020

RICS Construction and Infrastructure market survey Q1 2020

Following the introduction of social distancing measures to stop the spread of coronavirus, the RICS Q1 2020 UK Construction and Infrastructure Market Survey results are unsurprisingly consistent with a sharp deterioration in momentum.

The headline workloads indicator has moved into negative territory for the first time in almost eight years, and market confidence has fallen sharply. As such, the majority of contributors envisage a fall in workloads and profit margins as well as a decline in new hiring in the coming year.

However, the survey responses when analysed by date of submission clearly show weaker sentiment coinciding with the stricter lockdown. Survey responses that were received from 5th March till the 26th of March were still indicating a broadly resilient picture for the sector, with the majority of contributors reporting a pick-up in headline workloads (net balance of +16%).

After this date, between 27th March and 7th April, responses unsurprisingly signalled a sharp downturn in workloads with a net balance of -21% of respondents reporting a decline.

Bringing this together, the headline workloads net balance for Q1 2020 came in at -3% (compared +12% in Q4 2019). Sector wise, momentum slipped across all market segments apart from infrastructure, where contributors reported a modest rise in activity (net balance of +11%). Private and public housing workloads stagnated in Q1, while activity fell in the private commercial and industrial sectors.

At the headline level, both new work and repair and maintenance also saw a broadly flat picture, and there was no change in business enquiries for new projects and contracts in the past three months as a whole (although they fell noticeably towards the end of the survey period).

Average twelve-month expectations point to a drop in output over the coming year, with headline workload expectations for the next twelve months dropping to -13% in Q1 from a net balance of +50% in Q4. When splitting the sample feedback gathered from the 27th onwards reported a net balance of -40% for twelve month workloads expectations.

Again, the picture is more resilient in infrastructure, with 36% more contributors anticipating

workloads to rise rather than fall in the coming year, this figure was still positive post lockdown (+32% in the final week of survey returns). Within infrastructure, the energy, road and rail components are expected to see the strongest growth in output over the coming twelve months.

The RICS market confidence indicator, a composite measure of workloads, employment and profit margins expectations over the coming twelve months, fell sharply to -23% from +35% in Q4 (focusing on the more recent survey submissions shows the indicator falling to -46%). Within this, profit margins were anticipated to see sharpest fall in the coming year with 43% more surveyors anticipating a fall. Moreover, tender price expectations have eased significantly over the quarter in both the building and civil engineering components.

Simon Rubinsohn, RICS chief economist comments: “It is hardly a surprise that sentiment in the construction sector fell particularly sharply following the imposition of the lockdown. More ominously, the forward looking metrics have also softened materially, suggesting that it will not simply be a case of returning to where the industry was prior to the onset of Covid-19 as the government begins to ease the lockdown. Partly this reflects uncertainty about the likely state of the economy at this point and how this will impact on development, but it is also indicative of the challenge the sector is currently under as it attempts to access government funding to keep heads above water.”

Hew Edgar, head of government relations, added: “The supporting measures that the government introduced in the immediacy for the built environment – covering pay, rent, and business operating costs to name a few – were welcome, but it has become apparent that there are gaps that need addressing; not least parity in approach across the UK.

“The UK government must start exploring how the sector could taper the reopening of non-essential construction sites within stringent parameters of health and safety adherence; introduce grants; and review how repair and maintenance work could proceed whilst public buildings are not fully occupied. A combination of these will support professionals, the workforce, manufacturers and supply chains by providing a pipeline of work and vital cash flow in the short term.

“Fiscal stimulus is most effective once the construction starts on site; only then does finance start to flow down the supply chain. As such, the government should explore how best to accelerate and enable the design, planning approval, and procurement of construction projects to ensure construction-ready schemes can start when the pandemic subsides.”

April 22, 2020

WMCA announces major investment to transform brownfield sites

The West Midlands Combined Authority (WMCA) has approved a further suite of multi-million-pound investments to unlock and transform former industrial sites across the region including Fountain Lane in Sandwell and Abbotts Lane, Coventry.

As well as providing housing supply, new commercial premises and high-quality public amenities in line with the WMCA Design Charter standards, the investment will help the regional economic recovery following Covid-19, securing hundreds of jobs in a range of sectors.

The announcement from the WMCA’s Investment Board is a strong signal to the market that the region is continuing to use its brownfield site investment to keep the wheels of the economy turning during the unprecedented lockdown and give the private sector the confidence to invest and develop key sites.

Mayor of the West Midlands Andy Street said: “Despite the challenges we are currently facing, the work of the WMCA continues and investments are being made now that will ultimately help our regional economy bounce back strongly from this crisis.

“It is crucial we keep up momentum in unlocking the region’s brownfield sites to deliver much-needed land for development, safeguarding existing jobs and creating new ones in the process.

“Continuing to move forward with our strategic investment programme will also help maintain confidence in the market. The need to regenerate our derelict urban sites does not stop because of Covid-19, it becomes more important than ever.”

The Abbotts Lane and Fountain Lane deals follow a series of landmark funding commitments over the last six months for the regeneration of derelict industrial land, often referred to as brownfield.

Numerous multi-million-pound investments have been signed off by the WMCA’s Investment Board as the region continues to lead the way on brownfield regeneration, economic development and housing delivery.

The strategic funding programme set out by the WMCA includes commitments to offering affordable homes under the innovative new regional definition of affordability, which is applied to all projects it helps fund.

It also commits to working with socially conscious developers to design areas with local character, deliver inclusive growth in town centres and growth corridors, provide apprenticeships and build sustainably using advanced low-carbon methods of construction.

The ongoing investments under the brownfield funding pipeline come as the WMCA continues a positive dialogue with Government on securing more investment to further propel the programme.

Cllr Mike Bird, WMCA portfolio holder for housing and land and leader of Walsall Council, said: “A significant funding package has been agreed to breathe new life into sites across the region, including these two derelict industrial sites in Oldbury and Coventry. Both will help the region’s economy recover following the coronavirus crisis.

“These brownfield sites would most likely remain derelict without the WMCA’s intervention. By stepping in like this we can bring them back into use and help relieve pressure on the Green Belt.

“The building industry will be crucial when we come out of lockdown which is why we are continuing to make these significant investments and help put ourselves on a clear path to economic recovery.”

The derelict Fountain Lane site is located to the north of Oldbury town centre. Once home to industrial units and a foundry, it has been out of economic use since the buildings were demolished a decade ago.
As a result of its previous use, the site needs to be cleaned up and made ready for development.

The Abbotts Lane site, located immediately north of Coventry city centre, was formally used as a National Grid depot and operations centre.

Full details of the schemes at Abbotts Lane and Fountain Lane will be announced in the coming weeks.

As with other sites recently supported by the WMCA, including the former Caparo Steelworks in Walsall, the investment will help reinvigorate the area and enable housing and other amenities to be built for the local community.

The WMCA is investing funding to assist with the cost of delivering the developments, in particular to help make the area both safe and financially viable for future stakeholders.

The developments are expected to create a number of jobs including apprenticeships and opportunities for practical on-site work experience for young people.

The WMCA prioritises investment in brownfield sites located in prominent positions, close to railway stations, office buildings and car parking that will become well-balanced, mixed tenure developments.

Urban centre regeneration is a priority for the WMCA, especially as part of the region’s comprehensive and bold town centre regeneration and renewal programme.

April 14, 2020

WMCA funds new online construction training courses for local people

An innovative programme funded by the West Midlands Combined Authority (WMCA) to give local people the skills they need to start a new career in construction has moved online for the first time, to continue training during the Covid-19 shutdown.

The WMCA has worked with Birmingham-based training provider RMF Construction Training Academy to create a range of new courses in virtual classes by experienced tutors, in an innovative pilot scheme for the Construction Gateway programme.

The Construction Gateway offers unemployed people a free, hands-on introduction to construction skills – providing them the ‘tickets’ and qualifications they need to be site-ready for work – and, crucially, guarantees them a job interview on completion of the course.

The online classes, which started last week, enable candidates from across the West Midlands to access construction training, including an industry-specific Level 1 in health and safety, as well as plant machinery training on dumper trucks, ride-on rollers and excavators – all from their own homes.

The courses will include drone-captured video demonstrations and a mixture of group and one-to-one sessions. Each candidate will also benefit from one-to-one support for any additional help they may need.
The learners will be able to gain qualifications which are essential to work on any site, such as the Construction Skills Certification Scheme (CSCS) card, and more in-depth courses including City and Guilds accredited Level 2 NVQ in rail engineering track maintenance.

Groups of up to 12 will be able to take part in the courses, which will vary in length from three days to ten weeks depending on the course and each learner’s previous experience, with more than 50 people already signed up.

Andy Street, the Mayor of the West Midlands, said: “We know this is a very difficult time for the region, but when we emerge from lockdown, we will still have skills shortages in key sectors, including construction.
“And there are job vacancies now in the infrastructure sector, which means some people who have lost their jobs due to Covid-19 have an opportunity for a new start in construction.

“It’s brilliant news that we’ve been able to set up online training, in a sector where this might not seem possible, through this new scheme that we’ve developed in partnership with RMF Construction Training Academy.”

Dara McCarthy, operations manager at RMF Construction Training Academy, said: “We’re proud to be working with the WMCA to enable local people to continue to learn construction skills during these challenging times.

“We have filmed a series of video tutorials for our trainers to deliver digitally, and each candidate will be assigned an adviser who will assess their experience and develop a training plan.

“An additional benefit of online sessions is that candidates will be able to screenshot demonstrations on their phone and watch these as often as they need to, which is a good way of learning.”

The online training comes at a time when many new technological developments, such as GPS machine controls, are entering the construction industry. RMF intends to continue delivering digital courses to give the construction workforce the skills to adapt to these new ways of working.

Adults who are currently unemployed, or on short-hours contracts or low-skilled jobs, are eligible to join the Construction Gateway. This gives those who have lost work due to the coronavirus outbreak an opportunity to improve their skills and gain new qualifications. As well as learning practical, hands-on skills, learners also get help with interview techniques, CV writing and employability skills.

After completing the course, learners are supported on their journey to work through the National Careers Service for as long as they need, regardless of whether their first interview is a success.

Those who are not offered a job immediately are added to the West Midlands “site-ready talent pool” – which is shared with construction recruiters and provides a list of people who are ready for work immediately.

April 14, 2020

Financial and non-financial services need to re-boot to kickstart slowing productivity

ONS  labour productivity data from Q4 2019 revealed that productivity, as measured by output per hour, saw a small rise of 0.3% compared with the same quarter a year ago. This rise was caused by gross value added (GVA) growing at 1.1% compared with the same quarter a year ago, while hours worked grew by 0.8%. The 0.3% growth in output per hour was largely caused by a strong performance from construction, while manufacturing made the largest negative contribution to whole-economy productivity growth. Financial services made the second-largest negative contribution of the sector of-0.4% and non-financial services third with growth of -0.2%.

This trend of negative productivity growth is a common one with the financial service sector productivity levels falling 0.1% over the last decade. In light of this, chartered accountants Theta Financial Reporting unveils nationally representative research looking into productivity and appeal of professional services, including financial services. Across over 2000 UK adults, this survey looks into people’s attitudes towards the sector, their own productivity and their working environment.

Key findings

  • Over 17.5million Brits – 46% of the nation believes that working in ‘the city’ has a detrimental effect on peoples’ health and would not want their children to pursue a career there
  • 8.2 million Brits have actively avoided professional services as a career due to the demands of the industry
  • 34% of Londoners have avoided the professional services industry as well as a quarter (24%) of AB workers
  • Over a quarter of Brits – 26% or 6.7 million UK workers – don’t feel they received the required training to do their job effectively
  • This rises to 28% of AB workers
  • Four in 10 Brits (39%) feel less productive at work because of presenteeism

This research shows that professional services, including financial and non-financial services, have a productivity problem, with them being two of the largest contributors to negative growth of productivity in the economy. The research from Theta Financial Reporting demonstrates that British workers are actively avoiding these sectors due to health concerns and the demands of the industry. Coupled with millions of Brits not receiving the correct training to complete their job, this will add to the stumped growth in these sectors which has a severe impact on the entire economy.

With this problem continuing for the last decade, it is clear that something needs to change within the industry. With the current situation of millions of Brits working from home, in-office presenteeism will have diminished, and as over a third of British workers say that this is a cause of them lacking productivity, this new working environment could change the course of UK productivity, particularly in the professional services space.

Chris Biggs, managing director of Theta Financial Reporting, commented on the results of the survey:

“This data shows the fundamental problem that the industry has with productivity, and while individuals may be trying to make small tweaks to how they work to combat this, it is clear that there needs to be a more concerted effort to broach this issue once and for all.

While COVID-19 is having a huge impact on business and productivity at the moment, the UK is also going through a shift with millennials and generation z’s driving change towards a greater work-life balance, more focus on workplace mental health and shining a light on employee efficiency and productivity. This has only been exacerbated by lockdown periods during the Coronavirus crisis.

Professional services, for example, have for too long done things as they have always been done, and have been slow to move with the times, continuing to take part in archaic practices. This is leading to negative growth of productivity and a shrinking talent pool.

This research conducted by Theta Financial Reporting demonstrates that the professional services sectors need to change their practices to combat presenteeism and make the sector more appealing to a new generation of employees, otherwise they could face a major talent issue in the coming years. Once we are through the COVID-19 period of disruption, flexible working options and extended training programmes can help companies become more productive and change the course of UK productivity across the entire economy”

 

April 3, 2020

Support from Lloyds Bank safeguards jobs at demolition company

A demolition contractor has secured the jobs of all 33 of its staff during the coronavirus shutdown with support from Lloyds Bank.

Chelmsford-based Northeast Demolition UK Ltd work with large construction firms and housebuilders across South-East, East and South London to clear industrial, commercial and residential sites, demolishing all types of buildings from houses to tower blocks.

The company has decided to pause all work in order to safeguard the safety and wellbeing of staff during the COVID-19 outbreak and has put its workforce on furlough.

Lloyds Bank has provided a package of financial support to help with the firm’s cashflow during this period to enable it to pay its staff in advance of receiving a furlough grant from the government.

The Lloyds Bank support means the firm can meet its payroll obligations during this period and hasn’t had to make redundancies.

Following the government guidelines set out on Monday 23rd March to cease all essential works, Shaun Harvey, managing director at Northeast Demolition, said: “A lot of the sites we were working on are for hotels or flats. These aren’t essential buildings, such as hospitals for example, so we made the decision to pause all work as from Wednesday 25th March.

“As a demolition contractor we are the first on site. This can make welfare facilities and social distancing very challenging and we don’t want to risk the wellbeing of our staff and colleagues for a single second.

“At the point of making the decision to furlough our employees, we didn’t have much information about how it would work, not being eligible for the business interruption loan and not knowing when we would get the furlough funding from the government. Having additional credit from the bank meant we could safeguard jobs in the short-term.

“I contacted Stuart, my relationship manager at Lloyds Bank, and he was very quick to respond. He did a remarkable job for us and put additional credit in place within a few days. Lloyds Bank has been by our side throughout the past few weeks and I can’t fault them at all.”

Stuart Wiggins, SME relationship manager at Lloyds Bank, said: “Northeast Demolition is a responsible business that has made the welfare of its staff its number one priority.

“Pausing all contracts naturally impacts cashflow. Whilst government support is available, businesses need help in the short-term to meet their payroll obligations. We’re working quickly to make sure that businesses have the funding they urgently need.”

March 27, 2020

BFS confirms support measures for businesses during pandemic

SME partner, Bibby Financial Services (BFS), has confirmed its support for new and existing clients during the global Covid-19 pandemic.

Edward Winterton, UK CEO of BFS said: “We are very much open for business and willing and able to play our part in helping businesses get through this critical time.

“We have written to clients and business partners announcing the measures we have taken to ensure the safety of colleagues and clients alike. We are now detailing some of the actions we are taking, and processes we have in place, to support businesses overcome challenges regarding cashflow, working capital and currency volatility.

“We want to work with SMEs in all sectors to structure facilities which not only help them in the short-term, but also into the future.”

BFS’s dedicated client and new business teams are working to provide:

  • Responsive funding decisions – BFS endeavour to make funding decisions for new applications within 24 hours providing speed of response for prospective clients.
  • Bad debt protection reviews – where required, BFS will undertake bad debt protection reviews for existing clients and on new applications, allowing businesses to understand which debts can be protected against customer insolvency, non-payment or protracted default.
  • Continued support for those trading overseas – funding of export and import debt via specialist trade and export finance teams.
  • Foreign exchange services helping SMEs to protect against currency volatility.
  • Specialist support for subcontractors and construction sector SMEs, financing against contracts, framework agreements and applications for payment.

Speaking of measures announced by the UK government, Edward said:

“We support the government’s Coronavirus Business Interruption Loan Scheme as an important step in helping SMEs at this time.

“As both a partner to 12,000 SMEs, and as an employer of over 1,200 colleagues, we recognise the importance of having stable and sustainable sources of working capital.

“In addition to the measures we have announced to enhance our existing processes, our application for CBILS is pending. We hope to become an accredited funder over the coming days, enabling us to bolster our support further at this difficult time for SMEs and the wider economy”.

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