News
Glenigan: Fewer Shelved Projects as Confidence Improves
08/06/2010
There has been a significant reduction in the number and value of projects that are being placed on hold, according to Glenigan’s latest data. Furthermore, in a number of cases were developers have reviewed and reactivated stalled projects earlier than they planned as market conditions have brightened. Glenigan is now undertaking additional research into stalled projects in order to rapidly pick-up on any change in a scheme’s status.
The number of projects on hold in the three months to May was 43% down on the same period last year. In addition, the value of the projects (under the value of £100m) being placed on hold fell 61% over the same period.
Once again, this trend was not restricted to sectors which are either funded by the public or private sector. The value of education projects put on hold fell by 84% in the three months to May, while industrial projects also fell year on year by 71%. Similarly, the value of shelved social housing schemes and office projects were also running at a third of the level of a year ago.
While this decline is inflated by the comparison to a bloated first half of 2009, it can also be sign that private sector is no longer locked in the downward spiral it once was. Less encouragingly, potential cuts in government spending and policy reviews are likely increase the number of public sector projects put on hold over the coming months.
Another positive was the news the value of projects that were restarted, having been on hold increased over the three months to May compared to the previous three months. The residential, health and hotel sectors particularly benefitted from this.
However the value of project cancellations has also increased. Over the three months to May, the value of projects which were abandoned having previously been on hold increased significantly. Education and private housing projects were particularly affected: education projects accounted for 38% of all cancellations, while the value of abandoned private housing schemes was especially inflated by a £83 million project which had entered administration.
This article taken from the Glenigan subscriber newsletter, made freely available to CIMCIG members at http://www.glenigan.com/media/weekly_newsletter/8th_june_2010.aspx
