Following the release of the Deloitte’s regional crane surveys, we asked our Leeds and Birmingham office leads, Jamie Clark and Darron Owen, to share with us their thoughts about the results.
Leeds – a city putting young people at it’s heart.
Reading over the recent Deloitte Crane Survey for Leeds, it appears to be business as usual for a city that has seen massive investment and expansion over the past decade or so.
2022 saw a total of 22 new construction starts across residential, office, education, and public realm, as well as further works on the Connecting Leeds sustainable travel programme.
The report states that ‘despite the uncertainty of recent years, the city has seen some strong levels of construction and record-breaking activity’.
This is backed up by the stats. The number of construction new starts last year equalled that of 2021 as the highest the city has seen since 2007.
And despite conceding that some of this activity might be due to a lag in delivery during the height of the pandemic, it paints a strong picture of my adopted city’s ongoing evolution into one of the North’s premier destinations to study, work, and live.
Scratching beneath the surface
But as interesting as the top-line figures are, they don’t tell the full story. The development of Leeds, particularly the city centre, is a revolution with a firm eye on the future, creating an interconnected ecosystem for generations to come.
This is particularly evident from the amount of student accommodation development activity last year. A total of seven residential new starts broke ground in 2022, a 48% increase on 2021, adding an extra 3,294 beds to the city.
Leeds has long been known as an excellent place to study, both from an academic point of view, but also because as a city, it has a lot to offer students. It is home to a host of internationally recognised universities, one of the largest further education colleges in the UK, as well as Europe’s largest teaching hospital.
Combine this with great nightlife, shops, restaurants, and pubs, a rich sporting heritage, and a short bus ride away from some of the greatest scenery in England, and it is easy to understand why the city attracts 70,000+ students annually from across the globe.
Of course, not all these students stay – many foreign students return home to build a future there – but many do stay. According to the Knight Frank Survey, in 2021 35% of graduates reported they planned to stay in the city after finishing their education, up from a retention rate of 29% in 2014/15. It appears that Leeds is increasingly becoming an attractive place to work as well as study.
And this brings us on to our next interesting trend in this youthful revolution.
Private Rental Sector
The Crane Survey states that last year Leeds attracted more than £200m in BTR investment – the highest of any city region – and saw a 20% increase in investment in the private rented sector.
These city centre developments are very attractive and can include gyms, terraces, and other desirable amenities, as well as being located close to restaurants and bars.
The effect is to create a communal living environment that is almost an extension of the university experience itself, affording the opportunity to live well in the city centre.
The market has responded well, with many under 30s prepared to pay a significant proportion of their income to reside in one of these developments.
Combine this trend with the increase in student accommodation and you can feel the young and vibrant atmosphere that pervades the city centre. As the Crane Survey reveals, Leeds is a historic city with a youthful feel, created by judicious development in the right places, and it is this that will ensure its ongoing success as one of the UK’s most exciting destinations for students, young professionals and families alike.
Further work to do
Of course, the positivity across these markets does not mean everything is rosy. Whereas the city centre might be teeming with young people eager to enjoy everything Leeds has to offer, navigating it can be problematic. Leeds’s transport system has suffered chronic underinvestment for years, meaning it is no longer fit for purpose. The Crane Survey states that the West Yorkshire Combined Authority continues to work on plans for the region’s much needed Mass Transit System 2040, and we must take in trust that this will come to fruition. Such a transformation is well overdue.
And office developments in the city were significantly lower than the national average, with just two new starts last year compared to an average of 4.3. Could this be because there is a glut of office space on the market currently?
This maybe the case, but much of this is far lower quality than the Grade A office space sought by large, successful businesses. But with tighter regulations around sustainability soon to disrupt the market, and the cost of refurbishing this old stock to meet present day standards being very high, perhaps we’re due a market correction and new office developments will pick up as the old stock is repurposed as something different. Only time will tell.
These issues notwithstanding, Leeds remains a vibrant and dynamic city with a fantastic future. The Crane Survey paints a positive picture of current activity and future ambitions driven for, and by, the generations to come. And with some of the most revered education institutions in the UK dotted around our wonderful city, we know Leeds is in safe hands for many decades yet.
Birmingham – A City Built for Life
If the latest Deloitte Crane Survey tells us anything about Britain’s second largest city, it is that it’s a place where people lay down roots. Unlike the capital, where people commute long distances to and from the office, Birmingham pulls people into its vibrant and diverse communities and often, they chose to stay.
This recipe seems to be working. The city has seen successive years of growth and this can only continue as it revels in the afterglow of Commonwealth Games success. The games contributed around £450m to the West Midlands region alone and this is understandably giving investors and developers confidence in Birmingham’s economic future.
As a result, despite the turmoil of wider UK economy – recession, high interest rates, unprecedented energy prices, and supply side challenges – the Crane Survey rightly says it is a time for the jewel in the crown of the West Midlands to be bullish.
“2022 was a phenomenal year for the city and commenced a ‘Golden Decade’ of opportunity for Birmingham, as the Commonwealth Games catapulted the city and wider region onto a global stage,” the report proclaims.
“With the eyes of the world watching to see whether a city, undergoing significant regeneration, could deliver – deliver it did.”
Homes and Offices
Given Birmingham’s ability to attract and retain talent, it is little surprise that residential and office developments lead the charge in the city’s hunger for growth.
Residential builds are up 37% on 2021, with close to 6500 units under construction. In fact, 13 out of a total of 18 new starts last year were in the residential sector, and 2022 also saw a record breaking 2,398 new homes come to market. It’s fair to say the city is leading the UK when it comes to the provision of new, quality, and much needed housing.
Although the majority of this residential construction is outside of the city core, focusing areas such as Southside, Eastside and the Jewellery Quarter, this bodes well for the future. So many British cities are focused on city centre living, attracting students and retaining them as young professionals, that they can neglect families and others wanting to settle down. But Birmingham is bucking this trend and creating a city for all, which may well be key to snaring those young professionals in the future as they mature and themselves want to lay down roots.
But that isn’t to say nothing is happening in the city centre. In fact, something huge is happening – the city’s tallest building – the 155m Octagon development which is boldly emerging from the ground. On completion, the 49-storey behemoth will become the tallest octagon-shaped building in the world. Another key development putting Birmingham on the global stage.
Hand in hand with the surge in residential is a 40% increase in office space compared with 2021. After all, the new houses are likely to be filled with people hungry for rewarding careers and Birmingham has a great track record of providing these. Although just two new starts commenced in 2022, they are responsible for creating 866,969sqft of additional space, providing great opportunities for the world’s leading employers to further invest in this fantastic city.
If the 2022 Commonwealth Games ignited a ‘golden decade’ for Birmingham, this will be propagated by another great sporting spectacle, the 2026 European Athletic championship. After the success of 2022, it is no surprise the city was chosen as the first in the UK to host this exciting event.
Yes, this will benefit the region with a direct injection of cash, but it will once again further Birmingham’s and the West Midland’s reputation on the world stage, something which sport is almost unparalleled in being able to achieve.
This kind of PR cannot be bought, and another successful staging, as this will undoubtedly be, could see future events, investment, and talent eagerly heading to the city.
With this and other opportunities such as HS2, rapidly improving transport infrastructure, and big names such as HSBC and DMRC relocating here, the future for Birmingham is bright.
There are plenty of cranes on the skyline, as the Crane Survey reveals, and as time moves forward many more will point their long and welcome shadows to the future of our fantastic city as it continues to grow, evolve and welcome.
If you wish to discuss the above with Jamie or Darrown, please get in touch by emailing email@example.com or firstname.lastname@example.org