The impact of inflation across the construction supply chain fuelled by energy increases has led one of the UK’s largest buying groups to call for “realism” in pricing negotiations. The Office for Budget Responsibility (OBR) is forecasting an inflation peak of 9% this year which is driving material costs up
Roann Limited, the granite and quartz worktop supplier, celebrated a record-breaking month in February, reaching a sales total of £1,102,060. The Wakefield-based business secured three six-figure project deals with credible housebuilders and construction businesses which contributed to this sales peak, including Midgard Construction, Hill Partnerships and Vistry Partnerships. The news
Building output was boosted by sustained rise in new work across the board according to the Construction Purchasing Managers index for March. The latest reading of 59.1 was unchanged from February and well above the 50 mark that separates expansion from contraction. The index revealed the joint-fastest rate of output
Amazon Property, the leading London investor-developer run by CEO Charles Gourgey and COO Chris Lanitis, has committed, via Amazon Capital (the group’s private equity division), a £250 million real estate fund to invest in joint venture opportunities in the logistics, managed office solution, PBSA, Life Sciences and retirement sectors. Amazon
ISG has acquired a majority shareholding in ESS Group – the modern methods of construction (MMC) specialist headquartered in Dublin and Manchester. The investment underpins ESS Group’s ambitious growth strategy, and further enhances ISG’s leadership role transforming the construction industry through smart innovation and pioneering delivery approaches and methodologies. Founded
NHBC, the leading warranty and insurance provider for new homes in the UK, has announced that Roger Bullivant’s RBeam precast concrete foundation system has been officially welcomed to NHBC Accepts. NHBC Accepts is an all-inclusive, end-to-end service that helps to build confidence in innovative construction and enable innovative products to be fast-tracked
Insurance brokerage, risk management and consulting firm Gallagher has introduced RiskTalk, a voice-operated risk assessment tool for construction businesses – the first of its kind in the UK The app is suitable for phones or tablet devices, and removes the need for construction firms to complete lengthy paperwork and enter
Dominick Sandford, Managing Director at IronmongeryDirect and ElectricalDirect, said: “Last year saw yet more turbulence for UK construction, but the latest figures show that the industry ended 2021 on a real high. “The value of new orders rose by 9.2% between Q3 and Q4 to an impressive £13.3bn, which is the highest figure
213,000 Sq Ft Industrial Units To Boost Supply Shortages Interchange 26 LLP has completed on a forward funding deal with 4th Industrial (UK) LP for up to 213,000 sq ft of new industrial units at the Interchange 26 logistics and manufacturing hub in West Yorkshire. The new scheme has the
West Retail Park acquired in £11.70 million deal FWHRE, an Isle of Man Regulated Fund, listed on The International Stock Exchange (TISE), has completed the acquisition of units 1A and 1B, West Retail Park in the affluent residential suburb of Milngavie, just north of Glasgow. The two units are let
BDC 319 : Aug 2024
The impact of inflation across the construction supply chain fuelled by energy increases has led one of the UK’s largest buying groups to call for “realism” in pricing negotiations. The Office for Budget Responsibility (OBR) is forecasting an inflation peak of 9% this year which is driving material costs up along the length of the construction supply chain. Whilst able to accept reasonable cost pressure, National Buying Group (NBG) is increasingly concerned that price changes must be justified and be proportionate with transparent detail to support any changes. Nick Oates, Managing Director at National Buying Group says the market is difficult for everyone: “We understand this is a very challenging market and that is being reflected in our negotiations. However, there is a real danger that if prices increase too much, we will impact demand from the end consumer, which could ultimately kill the market. We need to spread the inflationary impact across the supply chain.” For the merchant, passing price increases on to the end user is increasingly more challenging, because they must also factor in the greatly increased cost of delivery onto any product price changes, says Nick. “Merchants are arguably the most vulnerable portion of the supply chain to this ‘double squeeze’ from both material and fuel pricing. In effect, merchants must find an extra circa 5% on top of the increase in material prices to cover the cost of delivery.” Nick says suppliers to the merchant sector can help in two ways – by looking at their stock levels and asking for “realistic” price increases. “We’re asking Suppliers to be reasonable about when they ask for price increases. If a Supplier is sitting on many months of stock, there is no need to ask for a price increase today. “Secondly, prices need to be more dynamic and reactive to commodity price changes. When commodity prices come down, Suppliers need to react as quickly as when they go up. That is only fair.” He concluded: “NBG and its Partners have always prided themselves on building strong relationships with their Suppliers. We understand that suppliers cannot absorb all the increase in cost and a proportion needs to be passed on, but independent merchants are also being impacted and their margins eroded by the cost of delivery, so we must take a longer-term balanced view.” For more information on National Buying Group, including how to join the premier buying group for independent merchants, visit https://www.nationalbuyinggroup.com/.
Roann Limited, the granite and quartz worktop supplier, celebrated a record-breaking month in February, reaching a sales total of £1,102,060. The Wakefield-based business secured three six-figure project deals with credible housebuilders and construction businesses which contributed to this sales peak, including Midgard Construction, Hill Partnerships and Vistry Partnerships. The news comes shortly after the business reported a record-breaking year in 2021, with a total sales value of £6,440,579. Following this profitable month, Roann Limited is seeing higher than ever before production figures and anticipates an average of £200,000 per week, in the very near future. “We’re thrilled with the results in February here at Roann Limited! These projects have been in the pipeline for over a year, and we’re delighted that we have now secured them all. We’ve been experiencing a large period of growth over the past two years, and it’s only set to continue. We’re really excited to get started on these new projects and continuing to expand our business growth,” said Scott Wharton, Sales Director at Roann Limited. Established in 1990, Roann Limited specialises in manufacturing, supplying, and installing high-quality granite and quartz worktops within the house building, property development and construction sectors. With more than 30 years’ experience, Roann Limited is dedicated to procuring stone worktops that help developers significantly reduce costs on their projects by selling direct to them. Roann Limited’s purpose-built factory in Wakefield houses more than £2 million worth of state-of-the-art stone manufacturing machines and equipment, enabling the business to fabricate more than 15,000 worktops every year. The company proudly holds accreditations with many of the industry’s leading health & safety schemes, including SSIP certification, and is also ConstructionOnline Gold Approved. Building, Design and Construction Magazine | The Home of Construction Industry News
Building output was boosted by sustained rise in new work across the board according to the Construction Purchasing Managers index for March. The latest reading of 59.1 was unchanged from February and well above the 50 mark that separates expansion from contraction. The index revealed the joint-fastest rate of output growth since June 2021 boosted by the highest level of new orders since August last year. Commercial work was the best-performing segment with an index reading of 60.8 due to projects restarting following the roll back of pandemic restrictions. Chartered Institute of Procurement & Supply group director Duncan Brock said: “But residential building became the laggard of the pack as affordability concerns were a factor in holding back progress particularly in new housing and refurbishment work.” Recoveries in residential work lost momentum in March with a reading of 54.9 and 56.3 for civil engineering. Deliver wait times climb A third of supply chain managers reported longer wait times for deliveries and sharp inflation rises as transport and raw material cost went up. The overall rate of input price inflation accelerated sharply since February and was the highest for six months. “Construction companies are braced for more disruption on the horizon as a result of the Ukraine conflict. The rise in purchasing demand fed into higher costs for materials already in short supply as energy hikes also impacted on business costs,” said Mr Brock. Input buying rose at the steepest pace since July 2021, driven by a combination of stronger demand and efforts to build stocks where possible. S&P Global economics director Tim Moore, whose company compiles the survey, said: “Business optimism slipped to its lowest since October 2020 on concerns that clients will cut back spending in response to rising prices and heightened economic uncertainty.” Property finance intermediary Hank Zarihs Associates said despite economic uncertainty tender opportunities and resilient customer demand meant development finance lenders were keen to offer construction loans to builders.
Amazon Property, the leading London investor-developer run by CEO Charles Gourgey and COO Chris Lanitis, has committed, via Amazon Capital (the group’s private equity division), a £250 million real estate fund to invest in joint venture opportunities in the logistics, managed office solution, PBSA, Life Sciences and retirement sectors. Amazon Property built its strong brand reputation for quality and fine attention to detail through delivering some 80 mixed use developments such as The Hempel Collection with British Land, The Park Crescent and The Soho Works Estate and acquiring over 3 million square feet of development and investment assets. The group’s success over a 25 year period is its operational flexibility in being able to consider a wide variety of asset classes, with varying degrees of complexity, and delivering best-in-class projects, this agility has been the hallmark of the brand. Over the last two years Amazon Property has focused on joint venture investments and trading assets and is now set for further expansion with a new wave of private equity funding and entry into the rapidly expanding care/retirement sector under Amazon Care. Amazon Capital has committed £100 million of equity and debt/bank funding, to raise the £250 million which will be used to provide private equity funding to joint venture partners/development managers and asset managers in the alternatives sectors including logistics, managed office solutions, PBSA, Life Sciences and retirement care. Chris Lanitis, COO of Amazon Property & Founder & CIO of Amazon Capital says: “Amazon Capital is a bespoke private equity operator who understands the real estate market and as a JV partner we offer long-term support, flexibility, innovation together with streamlined and fast decision making. We have committed £250 million of fresh funding and are seeking new joint venture opportunities across London and the UK with other talented entrepreneurs and sector leaders. We are able to make fast investment decisions, as opposed to prolonged board committees, and are committed to forming equity platforms and repeat deal flow in line with our partners’ long term business endeavours.” In logistics Amazon Capital will focus on funding or entering joint ventures (£5 to £30 million investment value schemes) for acquiring or developing 2nd generation estates of between 5 acres to 20 acres in size, typically providing 200,000 sq ft to 500,000 sq ft of warehouse accommodation. Previous funding by Amazon Capital has been used to acquire jv assets including the 17 acre (400,000 sq ft) Sirdar Business Park in Wakefield, the 15 acre Swan Lane Industrial Estate in Wigan and the 6 acre Moss Electrical Estate in London’s Dartford and most recently a 210,000 sq ft single let warehouse at Wakefield 41 Industrial Park, located at the intersection of the M1 and M62 motorways. In the managed office solution market, Amazon Capital will look to acquire landmark office buildings, with acquisitions from £5 million to £50 million, in locations including Central London, Greater London and the Home Counties. With the acquired office buildings Amazon Capital is offering a bespoke approach leasing floors to tenants and providing a Cat A plus plug-and-play office setup. The Conran Building in Shad Thames is an example of a currentjoint venture acquisition undertaken. In the student accommodation sector Amazon Capital will provide funding for acquiring PBSA sites without planning, providing 300 to 500 beds, in key university centres such as London and regional cities. In medical research hubs such as Cambridge, Oxford, Stevenage and London Amazon Capital will partner with global Life Sciences companies to provide funding for real estate infrastructure such as laboratories, R&D plants, medical/medicine manufacturing plants, drug/medical warehousing and scientist office spaces. In the care sector Amazon Care will be developing a collection of care homes of between 25,000 sq ft to 70,000 sq ft in size, providing between 25 to 150 suites, complete with luxurious lifestyle amenities operated through a private-rented-sector model with a focus on dementia care. Amazon Care are currently developing in Belgravia under the Loveday brand (fifth central London site) and are in the process of acquiring a number of sites in Zones 2 and 3.
ISG has acquired a majority shareholding in ESS Group – the modern methods of construction (MMC) specialist headquartered in Dublin and Manchester. The investment underpins ESS Group’s ambitious growth strategy, and further enhances ISG’s leadership role transforming the construction industry through smart innovation and pioneering delivery approaches and methodologies. Founded in 1989, the ESS Group employs more than 280 staff based in four offices and three manufacturing facilities across the UK and Ireland. The Group, which includes the ESS Modular and Spatial Initiative brands, specialises in delivering MMC solutions for clients in the public sector, healthcare and commercial markets. The financial strength and backing of the ISG business will enable the independently operating ESS Group to support its ambitious growth plans across the UK and Ireland, with a core focus on generating increasing opportunity across current and target public sector frameworks. The acquisition brings additional MMC capability and expertise to the wider ISG business, while maintaining the firm’s agile and responsive approach to client-led demand for innovative construction solutions. Paul Tierney, CEO at ESS said: “The ISG investment is a pivotal moment for the ESS Group, giving us a solid financial platform for our continued growth plans. We passionately believe in a better way and have been working for the last 30 years to bring our high-quality offering to clients. We are looking forward to what we are sure will be an exciting time for the industry as we see MMC continue to transform customer outcomes and expectations in the drive towards a net zero future.” Matt Blowers, CEO of ISG, commented: “Greater integration and collaboration are two ways that our industry can accelerate its performance to meet the growing demand for net zero construction solutions. The ESS Group brings a wealth of expertise, talent and innovation into ISG and enables us to collectively fast-track our journey developing and implementing leading-edge built solutions that are rooted in operational performance and the highest sustainable and ethical outcomes.”
NHBC, the leading warranty and insurance provider for new homes in the UK, has announced that Roger Bullivant’s RBeam precast concrete foundation system has been officially welcomed to NHBC Accepts. NHBC Accepts is an all-inclusive, end-to-end service that helps to build confidence in innovative construction and enable innovative products to be fast-tracked for NHBC warranty. As part of the new service, detailed and robust technical reviews of design, manufacture and construction results in provision of a certified usage licence for a bespoke NHBC Accepts logo and website listing. The RBeam is a factory produced reinforced precast concrete foundation system for low-rise developments. The system is used with a range of piled foundation techniques catering for many different soil types and ground conditions including clay heave situations. “Following a thorough approval process we are delighted to welcome Roger Bullivant Limited to NHBC Accepts,” said NHBC’s Innovation Manager, Richard Lankshear. “An NHBC Accepts certificate is a way of demonstrating that innovative products or systems have already been reviewed thus reducing the risk of delays on site. NHBC Accepts will play a critical role in ensuring developers, manufacturers, lenders and consumers have faith and confidence in the quality of new homes built with innovative forms of construction.” Richard Taylor, Bullivant’s Foundation Systems Director, added: “This approval brings customer confidence and improved productivity on site. We also recognise it as an important achievement in the progression of offsite manufacture in the residential market.” Bullivant’s Foundation Systems Technical Manager Nigel Rake said: “Roger Bullivant Limited has been designing, manufacturing, and installing precast foundations for many years. The RBeam system is a category 3 pre-manufactured component under the government’s MMC definition framework and we are very pleased that this has been given a seal of approval for NHBC Accepts. This will provide further assurance in our RBeam system to all our customers and the wider industry.”
Insurance brokerage, risk management and consulting firm Gallagher has introduced RiskTalk, a voice-operated risk assessment tool for construction businesses – the first of its kind in the UK The app is suitable for phones or tablet devices, and removes the need for construction firms to complete lengthy paperwork and enter data manually when carrying out risk assessments, with users conducting the process through recording voice notes The tool cuts down on the time and effort required by construction businesses to undertake health and safety duties with the average UK firm currently spending the equivalent of 36 days a year completing risk assessments However, despite this time commitment and the associated cost, many UK firms (49%) admit they are concerned they are not carrying out risk assessments thoroughly enough Two thirds of businesses (68%) claim the current manual way of completing risk assessment is complicated, leading to concerns they may not have an adequate defense in the event of an incident Failure to complete comprehensive risk assessments can lead to significant Health and Safety Executive (HSE) penalties for construction firms – with £64 million worth of fines paid by businesses in the sector over the last five years[i] – [i] https://www.hse.gov.uk/statistics/tables/prosecutions.xlsx Insurance brokerage, risk management and consulting firm Gallagher has introduced RiskTalk – a user-friendly voice-operated risk assessment app – to help construction businesses cut down on the time and expense of undertaking workplace safety assessments, and benefit from increased reporting reliability. The health and safety app helps construction businesses perform fast and efficient risk assessments to manage the risks on site to the health, safety and welfare of their employees and visitors to their premises. The app allows users to record observations and report hazards by simply speaking into their phone or a tablet device – removing the need for completing lengthy paperwork. Through a set of prescribed questions, RiskTalk guides users through the process of assessing and identifying risks present in the work environment, and detailing how they will control them. RiskTalk also makes theprocess much easier for managers to review risk assessments. Users can take photos in-app and send recorded voice memos straight to a cloud storage system, with managers able to approve assessments by using a voice sign-off feature. Reports can be generated via the app avoiding the need for a lengthy data entry process which can then be converted to PDF files if hard copies are required. In-built speech recognition technology can understand and process recordings in 220 languages to ensure it is accessible for a wide range of users. All entries are time, date and author stamped – making it easy in the case of a health and safety-related incident to locate risk assessments to prove they were completed in full prior to the event occurring. The app works offline – allowing users to conduct risk assessments and store data while working in areas with limited or no network coverage. Undertaking risk assessments is a significant time commitment for businesses and research commissioned by Gallagher, conducted last month among 200 UK firms, found that one in two companies (49%) are concerned they are not carrying out risk assessments thoroughly enough to protect their organisation, employees and clients – potentially leaving them without a strong defence in the event of legal actions, insurance claims and Health and Safety Executive (HSE) enforcement action. Cost was highlighted as another frustration among businesses regarding the completion of risk assessments. Over two fifths of firms (45%) feel that completing risk assessments is an expensive process – costing their business an average of £1,500 a year. This could be due to paying wages for employees undertaking assessments or for contractors who need to be paid to do them. Neil Hodgson, Managing Director of Risk Management at Gallagher, said: “We’re delighted to be bringing this innovative risk assessment tool to UK construction businesses. It is easy to use, makes the process of undertaking risk assessments quicker and more reliable, and firms within the sector will benefit from increased peace of mind that in the event of an incident they are more likely to have a robust defence. “This is particularly important when you take into account that half of UK firms are unsure whether they are completing the risk assessment process correctly. Evidence of risk assessments carried out and the steps taken to mitigate any identified risks can be crucial for construction firms in the defence of an insurance claim for personal injury or illness, or intervention by the HSE or other regulatory authority. Penalties can be severe – with the average fine paid by construction businesses across the past five years costing £86,000.” For further information, visit https://www.ajg.com/uk/risktalk/
Dominick Sandford, Managing Director at IronmongeryDirect and ElectricalDirect, said: “Last year saw yet more turbulence for UK construction, but the latest figures show that the industry ended 2021 on a real high. “The value of new orders rose by 9.2% between Q3 and Q4 to an impressive £13.3bn, which is the highest figure in over four years, since Q3 in 2017. “It also represents a 35% increase year-on-year, up from £9.9bn in Q4 2020, showing a real surge in momentum. “The infrastructure sector drove the largest rise in new orders; at the end of 2021, the value of new orders rose by 23% from £1.7bn to £2.1bn. “The private industrial sector also performed well and reported the second most significant increase (22% – up to £1.9bn). “They still have some way to go to catch the highest value sector though, with private commercial construction rising 14% to remain in the lead (£3.8bn). “Not all sectors saw growth, however, with housing in particular having a slow end to the year. The value of new public housing projects dropped by 19%, from £426m down to £345m, and private housing was also down (-0.4%, down to £3.7bn). “As well as variation between sectors, the figures also contrast dramatically across the UK. By far the largest increase was seen in the North East of England, where the value of new orders trebled (200%) from £575m to £1.7bn. “In London, the value fell by 15%, but at £3.8bn, the capital remains top of the list for regions. “Overall, the new data shows that UK construction is in a really positive place. With expensive new orders being placed all over the country, it’s a clear display of confidence in the industry. “Hopefully this trend will continue into 2022.” For more information on IronmongeryDirect, visit: https://www.ironmongerydirect.co.uk/ For more information on ElectricalDirect, visit: https://www.electricaldirect.co.uk/
213,000 Sq Ft Industrial Units To Boost Supply Shortages Interchange 26 LLP has completed on a forward funding deal with 4th Industrial (UK) LP for up to 213,000 sq ft of new industrial units at the Interchange 26 logistics and manufacturing hub in West Yorkshire. The new scheme has the potential to create some 300 new jobs for the region. The forward funding commitment will see the delivery of three units at the prime logistics hub located at the major J26 intersection of the M62 Transpennine motorway and M606 Bradford link. Reserved matters consent has recently been granted by Kirklees Council for a 64,500 sq ft unit and a 43,500 sq ft unit. A further planning application is under consideration for up to 105,000 sq ft, which forms the final phase of development. GMI Construction has been appointed as contractor and work is scheduled to commence on site in early 2022 with delivery of the two consented units expected in late Summer 2022. Works on the final phase will commence once planning has been considered by Kirklees Council. Interchange 26, an Opus North & Network Space Capital owned company, acquired the former water treatment works site on an unconditional basis in 2019 to facilitate the development of prime industrial accommodation and address the severe regional shortages. A comprehensive remediation and earthworks package has now been completed. This latest deal follows on from Interchange 26’s 10.4 acre land sale in 2020 to British Airways Pension Trustees Limited and Tungsten Properties. Work is underway on Super B, a new big box warehouse, which is set for completion in Q3 2022. Interchange 26 forms part of Opus North’s wider development strategy to enhance its £250m development programme with a focus on the logistics sector. Ryan Unsworth, Development Director of Opus North, said; “This forward funding agreement will enable us to bring three much needed mid-box units to the severely constrained regional pipeline, fulfilling our vision for this strategic site. This development will go some way to addressing the supply and demand imbalance in South Bradford and North Kirklees, while facilitating new jobs for the wider region.” 4th Industrial is a commercial real estate company that invests in multi let and light industrial property and was founded by experienced industrial property specialist Derek Heathwood. As of January 2022, the 4th Industrial portfolio totals 2.15m SFT across 12 estates located in key industrial submarkets across the UK. Interchange 26 LLP was represented by Dove Haigh Phillips and Knight Frank in the transaction while 4th Industrial represented themselves.
West Retail Park acquired in £11.70 million deal FWHRE, an Isle of Man Regulated Fund, listed on The International Stock Exchange (TISE), has completed the acquisition of units 1A and 1B, West Retail Park in the affluent residential suburb of Milngavie, just north of Glasgow. The two units are let to Aldi and Home Bargains until June 2039 and June 2034 respectively. The Aldi rent reviews are linked to RPI. Over the past 24 months, both supermarket and discount retail assets have been highly sought after, with investors attracted by the retailers resilient trading performances and the long leases that characterise that sector. The purchase price of £11.70 million reflected a net initial yield of 4.86%. Lismore Real Estate Advisors and Avison Young jointly advised the purchaser, whilst Sheridan Keane acted for the vendor.
