MIDLANDS
Tender price indices in the Midlands are set to marginally increase over rates of inflation as the rises of recent years settle down overall. Short-term and long-term growth is expected for the region, driven by companies relocating out of London’s high rental market and expansion of the technology sector.
With the rise in digital technology and AI, large corporations are having a ‘race to the top’, which is driving an increasing demand for MEP equipment and grid power. Coupled with labour shortages in UK manufacturing, this is pushing prices up and increasing lead-in times for critical equipment.
Lack of infrastructure has long proved to be a blocker to development opportunities. With rising demand for grid connections, the government must hasten the delivery of new infrastructure to attract increased private investment.
MARKET CONDITIONS & PIPELINE
Market growth expected in 2025 but project starts inconsistent across sectors
The construction market in the Midlands is expected to grow in 2025, with private housing being the fastest-growing sector.
Coventry’s construction market is characterised by significant regeneration projects, a focus on affordable and sustainable housing, and investments in skills and infrastructure. Birmingham city centre is seeing multiple high-rise commercial and residential developments as part of the second city’s ‘Our Future City’ plan for expansion.
Sentiment is cautiously optimistic in the West Midlands commercial sector. The East Midlands is seeing growth in the logistics and manufacturing and transport sectors, buoyed by government support for East Midlands Freeport and Midland Main Line.
The industrial sector saw a decline in activity from the previous year, with the anticipated uplift not yet realised. Retail projects remain a continued challenge and the sector is expected tougher times ahead with the increases to National Insurance and the National Minimum Wage.
There is a positive trend in new project starts, with a reported 33% increase in the quarter, but this is not consistent across all sectors. Rising material and labour costs and supply chain challenges may limit the volume of construction. Developers, however, see significant opportunities in the region. The region’s strategic location and robust infrastructure continue to make it an attractive destination for investment.
RLB Market Activity Cycle
The RLB Market Activity Cycle is a representation of the development activity cycle for the construction industry.
RLB considers 10 sectors to be representative of the construction industry as a whole. Each sector is assessed as to which of three activity level zones – peak, mid or trough – best represents the current status of the sector within the cycle. This assessment is then refined by identifying whether the current status is in a growth phase or a decline phase.
The subjective current performance of sectors is identified by ascribing one of the coloured arrows (shown in the legend of the chart) to each sector. NB: In this analysis, sectors are not individually weighted.
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Market sector activity analysis: Midlands
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of a region enables the calculation of a regional representation of percentage of sectors in each phase of the cycle at a point in time.
Market sector activity analysis: United Kingdom
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of multiple regions enables the calculation of a national representation of percentage of sectors in each phase of the cycle at a point in time.
TENDER PRICES
- Our tender price forecast for the Midlands for the next 12 months is predicting a rise of approximately 3%.
- Thereafter, we anticipate a continued uplift of between 3.5% and 4% per annum.
Tender price change: Midlands
▉ RLB Midlands
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors (High) ▉ Competitors (Low)
INPUT COSTS
- Pricing remains stable with no major shocks in the period. Typical annual increases have been seen in several areas, largely driven by an increase in labour costs.
SECTOR FOCUS
Commercial
Despite economic uncertainties, there is steady demand for high-quality office spaces, driven by businesses seeking to modernise their work environments and attract top talent. A recent example of this is Ernst & Young's announcement to relocate to Three Chamberlain Square in Birmingham. Overall, the sector remains resilient, with a focus on sustainable development and innovative solutions to meet the evolving needs of the commercial market.
Logistics & Manufacturing
The logistics and manufacturing sector in the Midlands is thriving, driven by its strategic location and robust infrastructure. The region is a key hub for logistics, with 90% of the UK population reachable within four hours. Significant investments in sustainable warehouse spaces such as West Midlands Interchange, the UK’s most significant rail served logistics development, are enhancing the sector’s capacity and capability.
Residential
Overall, the region’s residential sector is set to benefit from strong demand, attractive investment opportunities and a focus on sustainability, making it a key area for growth in the UK’s property market. Birmingham, Nottingham and Coventry are seeing a rise in demand for housing, fuelled by economic growth, infrastructure investments and ongoing regeneration projects.
Sport
The outlook for the sports sector in the Midlands is promising, with several significant projects in the pipeline driving regeneration and economic development. These include a transformative £100m investment by US company Knighthead to create the new Sports Quarter in East Birmingham, providing a 60,000-seater stadium, sporting facilities, and commercial and residential spaces. Another project is the proposed redevelopment of Sixways Stadium, home of the Worcester Warriors.
BIRMINGHAM, UK
Lower Essex Street
Lower Essex Street, Digbeth, is just a five-minute walk from Birmingham New Street Centre and the Bullring shopping centre. For this residential project, RLB is delivering employer’s agent and cost management services on behalf of The Galliard Apsley Partnership.
The development involves the construction of 628 apartments split over three separate blocks. The project will feature high-quality amenity spaces for residents and accommodation up to Level 26. Also included is a podium landscaped area and a Level 27 residents' lounge with views over the Birmingham skyline.
