What is hindering your market at the moment?

Working on behalf of commercial landlords and developers, we are frequently encountering several factors affecting project feasibility, programme timings and build efficiencies once at construction stage.

The current ongoing economic uncertainty that we are all witnessing, personally and professionally, has created a challenging environment for development projects across the spectrum. Considerations including inflation, interest rates and geopolitical issues can deter investment and hinder appetites for the commitment to new projects.

In the labour market, we are observing situations where contractors must choose from a shrinking pool of sub-contractors and specialist trade companies. This can directly impact project timescales and costs. The root causes include an increase in contractors ceasing to trade, coupled with an ageing skilled workforce and a lack of younger entrants to trades.

Cost fluctuations, particularly in materials, are leading to some schemes being temporarily or sometimes permanently postponed. Contractors are notably becoming more conservative and risk averse. As a result, project stakeholders are having to adapt via proactive planning, risk management and communication strategies to navigate the market, meet financial expectations and achieve the desired outcome.

What opportunities are you seeing in your market at the moment?

We are involved in some exciting projects repurposing existing assets for new uses. A recent example is the re-configuration of a former retail and restaurant space into a mixed-use leisure facility. Developing via this approach offers investors a cost-effective and sustainable way to adapt spaces to meet current market demands. Reusing existing shell structures also often allows for shorter programme times, bringing new offerings to the market more quickly than new build projects.

We are also seeing a push towards the de-carbonisation of real estate assets with clients increasingly focused on projects specifically targeted at reducing carbon emissions, achieving sustainability goals and ultimately working towards net zero carbon targets. We anticipate these schemes gaining momentum as the push towards improved EPC ratings and Net Zero goals intensifies.

What has surprised you the most about your sector post pandemic?

During the pandemic, we were often bombarded with headlines focused on the difficulties in the real estate market and the struggles that commercial landlords and developers were facing. It has been reassuring to see how the industry has bounced back with renewed views on what works.

In the commercial office sector, there is now an emphasis on creating best-in-class multi-faceted environments redesigned to accommodate hybrid working patterns, rather than more conventional CAT A refurbishments and office layouts. End-user wellness, experience and productivity have become much larger considerations.

Health and sustainability are increasingly prioritised, with developers focused on advanced ventilation systems, green spaces and energy efficient design to meet user expectations and regulatory demands.

Additionally, we have seen a significant push towards integrating technology in buildings, including smart monitoring systems, digital infrastructure, and contactless solutions. Implementing these systems has become a reality, offering enhanced property management capabilities, improved tenant experiences, and greater efficiencies in building operations.

What differentiates the service you offer to your clients, from your competitors?

Choosing the correct project manager can make a huge difference to the success and smooth delivery of a project.

We combine a blend of industry knowledge, practical insight, and a pragmatic approach to suit clients’ needs. Overcomplication is avoided and we take a commercial approach with a commitment to building lasting relationships with clients and stakeholders. Our goal is to make the inception-to-completion process smooth and enjoyable for both clients and project teams.

What advice would you give your younger self when you first started your career in property?

A message to my younger self as well as anyone starting a career in property: it is crucial to recognise that every day is a learning experience in the industry. No one becomes an expert in their specific field overnight; we are all continually developing our personal skillset and knowledge.

The nature of the industry ensures that the learning never stops, and it is never silly to ask questions, a lot of them are often necessary!

What has been the best piece of advice that you’ve been given during your career?

Several colleagues I have worked under have emphasised the importance of maintaining a keen eye for detail while keeping the bigger picture in mind during an instruction.

It is often easy to become fixated on minor details, though important, may be less significant in the context of the whole project. Strive to simplify rather than overcomplicate things. This approach will ultimately benefit not only yourself but also the people you are collaborating with.

What’s the best work decision you have ever made?

I committed to completing my RICS chartership during the early years of my graduate career. Pursuing this accreditation early on helped build my technical knowledge and deepen my understanding of my role.

Crucially, achieving my chartership also boosted my confidence in delivering services to clients. Perhaps most importantly, I focused on completing the process before my professional and personal life could interfere!

What is hindering your market at the moment?

Working on behalf of commercial landlords and developers, we are frequently encountering several factors affecting project feasibility, programme timings and build efficiencies once at construction stage.

The current ongoing economic uncertainty that we are all witnessing, personally and professionally, has created a challenging environment for development projects across the spectrum. Considerations including inflation, interest rates and geopolitical issues can deter investment and hinder appetites for the commitment to new projects.

In the labour market, we are observing situations where contractors must choose from a shrinking pool of sub-contractors and specialist trade companies. This can directly impact project timescales and costs. The root causes include an increase in contractors ceasing to trade, coupled with an ageing skilled workforce and a lack of younger entrants to trades.

Cost fluctuations, particularly in materials, are leading to some schemes being temporarily or sometimes permanently postponed. Contractors are notably becoming more conservative and risk averse. As a result, project stakeholders are having to adapt via proactive planning, risk management and communication strategies to navigate the market, meet financial expectations and achieve the desired outcome.

What opportunities are you seeing in your market at the moment?

We are involved in some exciting projects repurposing existing assets for new uses. A recent example is the re-configuration of a former retail and restaurant space into a mixed-use leisure facility. Developing via this approach offers investors a cost-effective and sustainable way to adapt spaces to meet current market demands. Reusing existing shell structures also often allows for shorter programme times, bringing new offerings to the market more quickly than new build projects.

We are also seeing a push towards the de-carbonisation of real estate assets with clients increasingly focused on projects specifically targeted at reducing carbon emissions, achieving sustainability goals and ultimately working towards net zero carbon targets. We anticipate these schemes gaining momentum as the push towards improved EPC ratings and Net Zero goals intensifies.

What has surprised you the most about your sector post pandemic?

During the pandemic, we were often bombarded with headlines focused on the difficulties in the real estate market and the struggles that commercial landlords and developers were facing. It has been reassuring to see how the industry has bounced back with renewed views on what works.

In the commercial office sector, there is now an emphasis on creating best-in-class multi-faceted environments redesigned to accommodate hybrid working patterns, rather than more conventional CAT A refurbishments and office layouts. End-user wellness, experience and productivity have become much larger considerations.

Health and sustainability are increasingly prioritised, with developers focused on advanced ventilation systems, green spaces and energy efficient design to meet user expectations and regulatory demands.

Additionally, we have seen a significant push towards integrating technology in buildings, including smart monitoring systems, digital infrastructure, and contactless solutions. Implementing these systems has become a reality, offering enhanced property management capabilities, improved tenant experiences, and greater efficiencies in building operations.

What differentiates the service you offer to your clients, from your competitors?

Choosing the correct project manager can make a huge difference to the success and smooth delivery of a project.

We combine a blend of industry knowledge, practical insight, and a pragmatic approach to suit clients’ needs. Overcomplication is avoided and we take a commercial approach with a commitment to building lasting relationships with clients and stakeholders. Our goal is to make the inception-to-completion process smooth and enjoyable for both clients and project teams

What advice would you give your younger self when you first started your career in property?

A message to my younger self as well as anyone starting a career in property: it is crucial to recognise that every day is a learning experience in the industry. No one becomes an expert in their specific field overnight; we are all continually developing our personal skillset and knowledge.

The nature of the industry ensures that the learning never stops, and it is never silly to ask questions, a lot of them are often necessary!

What has been the best piece of advice that you’ve been given during your career?

Several colleagues I have worked under have emphasised the importance of maintaining a keen eye for detail while keeping the bigger picture in mind during an instruction.

It is often easy to become fixated on minor details, though important, may be less significant in the context of the whole project. Strive to simplify rather than overcomplicate things. This approach will ultimately benefit not only yourself but also the people you are collaborating with.

What’s the best work decision you have ever made?

I committed to completing my RICS chartership during the early years of my graduate career. Pursuing this accreditation early on helped build my technical knowledge and deepen my understanding of my role.

Crucially, achieving my chartership also boosted my confidence in delivering services to clients. Perhaps most importantly, I focused on completing the process before my professional and personal life could interfere!

The changing demographic within the UK has resulted in a situation where, for the first time, there are more people of pensionable age than there are children under the age of sixteen. This, coupled with the aging workforce in the construction industry, both within the contracting and consultancy markets, means that it is an alarming time for the industry. Satisfying labour workforces and recruitment demands has become a very real and pertinent issue for both contractors and consultancies.

Recruiting people into the industry is not a new challenge, but the changing demographic of the country is exacerbating the problem, requiring immediate attention. ​

Challenges caused by the construction skills shortage

It is essential to view these challenges within the broader context of the changing modern world, including increased flexible working, EU worker policy, the implementation of modern construction methods, and the efficiencies being driven through these technologies.

However, in the short to medium term, the aging workforce is straining the labour supply, leading to increasing labour costs. Wages have risen by 6% from a shortage of skilled tradespeople.

This is putting upward pressure on outturn construction costs as clients and developers strive to make their schemes viable. ​ Contractors are grappling with inflation, supply chain disruption, and a diminishing supply of workers to choose from as costs increase. Some contractors have even been forced to cease trading due to these challenges. All this has been too much for some contractors and we have seen some notable companies cease trading.

In terms of growth, the UK will look to construction to kickstart the economy in Q3 2023 and beyond. However, the drain of resources will put sustained growth at risk and make it difficult to meet the aforementioned numbers over the next few years.

Construction has historically leaned on workers from the European Union to satisfy this demand but according to the ONS, between 2020 and 2017 there was a 42% decline in the number of EU workers, compared to just a 4% drop from that of UK workers.

It remains to be seen what the effect of the ‘Back to Work’ budget will have on the industry after the government has relaxed migration requirements for key workers and whether this will mitigate some of this decline.

What are some of the schemes trying to help?

The government is trying to do its bit by the introduction of schemes to flood the younger end of the industry with the next generation. One such initiative is the introduction of the T Level in construction. This new technical qualification can be pursued after GCSEs and is the equivalent of 3 A Levels. Schemes like this can be used in collaboration with companies to meet their resourcing requirements and prepare the apprentices for the workplace. The courses are two years long and include nine weeks minimum working with an employer as an industry placement.

Although similar to apprenticeships, T levels will be more classroom-based, and give young people a route to academic achievement in a technical role.

In addition to the T level, there is the Construction Skills Fund, funded by the CITB, which aims to set up training hubs across the country. The funding supports live projects, providing to onsite experience to nearly 20,000 participants. Major contractors Wilmott Dixon, Balfour Beatty, and Morgan Sindall are just some of the major players in this scheme and have directly hired individuals for various roles.

Opportunities to help mitigate the skills shortage ​

The skills shortage is also impacting the consultancy sector of the industry. There is still a large proportion of the workforce that is aging, and the industry needs to do more to attract young talent.

The consultancy workforce has still seen the effects of Brexit and Covid 19; the exodus of EU workers and ‘big resignation’ of the older workforce after the pandemic. This is compounded by the globalisation of the construction industry and the attractiveness of international markets such as Australia, New Zealand, and USA in drawing talent away from UK consultants.

To address this, the Colliers Bristol Project and Building Consultancy team are actively contributing to rebalancing the scales by having over 25% of the team composed of apprentices. Two of them are pursuing their education at the University College of Estate Management, while the other two are enrolled in the local University of the West of England. ​

Additionally, there are a further two apprentices within the Bristol office that are part of the larger Colliers ‘Emerging Talent’ programme’. ​

Applicants are being encouraged for the next intake in 2024 and applications will open in autumn 2024.

In conclusion, there is a growing recognition within the industry of the challenges we currently face, particularly in the short to medium term, concerning the skills shortage. Initiatives like the government's T level and CITB Construction Skills Fund serve as positive starting points. However, it is now the responsibility of companies to drive their own programs, such as Colliers' Emerging Talent, to address these challenges.

The industry must adopt a cohesive and collaborative approach to: Attract skilled workers already working elsewhere in the industry

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The changing demographic within the UK has resulted in a situation where, for the first time, there are more people of pensionable age than there are children under the age of 16. This, coupled with the aging workforce in the construction industry, both within the contracting and consultancy markets, means that it is an alarming time for the industry. Satisfying labour workforces and recruitment demands has become a very real and pertinent issue for both contractors and consultancies.

These are the numbers that the UK construction industry is faced with currently.

Recruiting people into the industry is not a new challenge, but the changing demographic of the country is exacerbating the problem, requiring immediate attention. ​

Challenges caused by the construction skills shortage

It is essential to view these challenges within the broader context of the changing modern world, including increased flexible working, EU worker policy, the implementation of modern construction methods, and the efficiencies being driven through these technologies.

However, in the short to medium term, the aging workforce is straining the labour supply, leading to increasing labour costs. Wages have risen by six per cent due to a shortage of skilled tradespeople.

This is putting upward pressure on outturn construction costs as clients and developers strive to make their schemes viable. ​ Contractors are grappling with inflation, supply chain disruption, and a diminishing supply of workers to choose from as costs increase. Some contractors have even been forced to cease trading due to these challenges. All this has been too much for some contractors and we have seen some notable companies cease trading.

In terms of growth, the UK will look to construction to kickstart the economy in Q3 2023 and beyond. However, the drain of resources will put sustained growth at risk and make it difficult to meet the aforementioned numbers over the next few years. ​

Construction has historically leaned on workers from the European Union to satisfy this demand but according to the ONS, between 2017 and 2020 there was a 42 per cent decline in the number of EU workers, compared to just a four per cent drop from that of UK workers.

It remains to be seen what the effect of the ‘Back to Work’ budget will have on the industry after the government has relaxed migration requirements for key workers and whether this will mitigate some of this decline.

 

What are some of the schemes trying to help?

The government is trying to do its bit by the introduction of schemes to flood the younger end of the industry with the next generation. One such initiative is the introduction of the T Level in construction. This new technical qualification can be pursued after GCSEs and is the equivalent of three A Levels. Schemes like this can be used in collaboration with companies to meet their resourcing requirements and prepare the apprentices for the workplace. The courses are two years long and include nine weeks minimum working with an employer as an industry placement.

Although similar to apprenticeships, T levels will be more classroom-based, and give young people a route to academic achievement in a technical role.

In addition to the T level, there is the Construction Skills Fund, funded by the CITB, which aims to set up training hubs across the country. The funding supports live projects, providing to onsite experience to nearly 20,000 participants. Major contractors Wilmott Dixon, Balfour Beatty, and Morgan Sindall are just some of the major players in this scheme and have directly hired individuals for various roles.

Opportunities to help mitigate the skills shortage ​

The skills shortage is also impacting the consultancy section of the industry. There is still a large proportion of the workforce that is aging, and the industry needs to do more to attract young talent.

The consultancy workforce has also seen the effects of Brexit and Covid 19; the exodus of EU workers and ‘big resignation’ of the older workforce after the pandemic. This is compounded by the globalisation of the construction industry and the attractiveness of international markets such as Australia, New Zealand, and USA in drawing talent away from UK consultants.

To address this, the Colliers Bristol Project & Building Consultancy team are actively contributing to rebalancing the scales by having more than 25 per cent ​ of the team composed of apprentices. Two of them are pursuing their education at the University College of Estate Management, while the other two are enrolled in the local University of the West of England. ​

Additionally, there are a further two apprentices within the Bristol office that are part of the larger Colliers Emerging Talent programme. ​

Applicants are being encouraged for the next intake and applications will open in autumn 2024.

In conclusion, there is a growing recognition within the industry of the challenges we currently face, particularly in the short to medium term, concerning the skills shortage. Initiatives like the government's T level and CITB Construction Skills Fund serve as positive starting points. However, it is now the responsibility of companies to drive their own programs, such as Colliers' Emerging Talent, to address these challenges.

The industry must adopt a cohesive and collaborative approach to:

Attract skilled workers​ alreadyworking else where in the industry

Attract people​ back to the industry that have now left

Shortening qualification periods​ through intense training​ to meet demand quicker

Improving​ the retention of staff​ within the industry

Striving to increase productivity​ through innovation​

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Alex Vacher​
Director
Cost Management alex.vacher@colliers.com

Alex is ​ Director and Chartered Quantity Surveyor with over 10 years of industry experience in Cost Management and Quantity Surveying.

Alex is passionate about delivering excellent commercial advice for our clients for them to obtain best value. His focus is on how he can apply commercial acumen to add value for our clients through all stages of the project.

As the head of the Cost Management team at our Bristol office, Alex assumes the responsibility of leading a highly skilled and dedicated team, ensuring the delivery of outstanding results for our esteemed clientele.

 

Alex Vacher​
Director | Cost Management

Alex is ​ director and Chartered Quantity Surveyor with over 10 years of industry experience in Cost Management and Quantity Surveying.

Alex is passionate about delivering excellent commercial advice for our clients for them to obtain best value. His focus is on how he can apply commercial acumen to add value for our clients through all stages of the project.

As the head of the Cost Management team at our Bristol office, Alex assumes the responsibility of leading a highly skilled and dedicated team, ensuring the delivery of outstanding results for our esteemed clientele.