News
Glenigan - sharp drop in shelved projects brightens industry prospects
23/03/2010
The latest Glenigan data on shelved projects is encouraging. At £1.5 billion, there had been a 62% drop in the value of projects (excluding project of £100 million or more) being shelved over the last 3 months compared to a year ago. In addition the total number of schemes shelved in February, at 389, was also around half of what was witnessed a year ago. However, whilst the number of projects being placed on hold is clearly falling, the immediate fate of existing shelved schemes is less clear.
In contrast the value of the number of projects that had been re-started, having been on hold, decreased by 30% in the three months to February against the previous three months. In particular a pick up last autumn in the number of reactivated private housing projects appears to have lost momentum with the value of shelved private housing schemes being reactivated dropping 40% against the preceding three months. Nevertheless, the sector still accounted for over a fifth of the total reactivations (whereas it accounted for only 11% of cancellations). Furthermore, the latest round of Kickstart funding may be help boost numbers over the coming months.
Encouragingly, a third fewer frozen projects were abandoned during the three months to February compared to the previous three months. The only exception was the cancellation of office projects, which increased by 13%. However, the office sector also saw the biggest fall in projects being shelved in the three months to February, being 74% down on the previous three months. Conditions in the commercial property market have strengthened over the last 6 months and Glenigan is forecasting a gradual recovery in office project starts during the second half of 2010.
Reproduced with consent from the Glenigan Subscriber Newsletter - made available free of charge to CIMCIG members here - http://www.glenigan.com/newsletter2010/mar23rd2010_custnews.asp#topic
