A brave new world
News | December 13, 2022
2 min read
Jonathan Forth, an associate partner at specialist building consultancy HartDixon, reflects on how the three Rs of Russia, return to work and repurposing are reforming the construction industry.
Aside from becoming an incredibly painful thorn in the side of global security, Russia’s invasion of Ukraine has delivered economists an unwanted case study in the disruptive nature of the ripple effect.
The impact of the war in Ukraine has reverberated around the business world, creating shock waves that have severed supply chains, sent energy prices soaring and sparked spiralling inflation.
The construction sector is certainly carrying its share of scars, with the ready availability of timber, glass and steel plummeting and project costs escalating as a consequence of inevitable delays.
This uncertainty along with rising inflation, an increased cost of finance and yields moving out has created an understandable nervousness among investors, with many pausing on giving the green light to new-build developments.
However, for all the uncertainty these factors have caused, it is the legacy of another global tragedy – the coronavirus pandemic – that I believe has had a more telling effect on the business of building.
Despite the millions of vaccines administered over the course of the past two years and places of work becoming increasingly populated once more, Covid’s cloud remains evident.
Retail and hospitality are certainly still reeling and readjusting to life post-lockdowns. While an appetite for shopping in the real- rather than virtual-world is returning, the days of visiting a big London store to buy large items look well and truly numbered.
The market desires division – and landlords are looking to respond accordingly by splitting once expansive and expensive floorplates into smaller units, for more ‘luxury’ products such as perfume and jewellery.
Similarly, office space – as a direct result of the rapid rise of hybrid working prompted by months of enforced remote working – is evolving to satisfy the current demands of occupiers.
Company owners are seeking shorter leases and smaller – but generally higher quality – offerings to cater for their employees’ preferred blend of home and office life. The trend for plug-and-play space is strengthening and landlords keen to lay claim to the higher rents it attracts are exploring how to maximise their existing portfolios.
Multi-storey buildings once home to tech companies’ headquarters are being reimagined and transformed into a profitable mix of retail, residential and office space.
Repurposing is very much the order of the day, which is why, in part, HartDixon has continued to be busy and grow through the turbulent times created by Covid. Business, thankfully, remains incredibly brisk thanks to our expertise-led project management services to implement repurposing, but also due to our professional services in surveying, where maintenance planning, dilapidations and due diligence services are in high demand
The need to recycle stock and make the “old” more sustainable – both environmentally and economically – is proving a welcome test of our experience, and our proficiency at conducting feasibility studies is helping to shape the hard decisions being taken by property owners in the wake of what were until recently unimaginable events.