Bonanza year for leisure and education project starts

Project starts in 2024 have accelerated by a fifth, despite economic turbulence, mostly driven by leisure and education real estate, data from Glenigan has revealed. In the January 2025 edition of its Construction Review, the intelligence specialist tracked work commencing on site that averaged £10.4bn per month over 2024, up 20% from 2023. Projects valued over £100m saw a 58% increase in construction starts year-on-year, while project starts of those valued below £100m edged up by 1%. Offices and resi on the back foot Sector-wise, the industry saw a considerable uptick in the delivery of leisure sector real estate, with 30% more projects featuring hotels, retail and entertainment facilities starting on site in 2024. Work on site for community and amenity developments also rose 11% from 2023 levels. Project starts for education space increased by 7% year-on-year and industrial projects starts grew 4%. Construction of offices has declined by 19% over the last year, reflecting shifts in workplace trends. Works to deliver new homes have also lagged last year’s pace by 4%, with private housing and social housing starts down 9% and 10%, respectively, compared with 2023, amid affordability and funding challenges. Geographical inconsistency The South East emerged as the UK’s most developing region in 2024 with a 17% increase in underlying project-starts when compared with the prior year. Construction starts in Northern Ireland have accelerated by 23% year-on-year and by 13% in the South West. Yorkshire and the North West also had a good year in terms of real estate development, with construction starts rising 8% and 5% year-on-year, respectively. In contrast, London faced challenges with a 15% decline in construction starts over 2024 compared with 2023, as did Scotland and the East of England where projects starts fell 2% and 1%, respectively. On the planning front, Glenigan tracked an overall decline of 19% in the number of schemes that had secured detailed planning approvals in 2024 when compared with 2023, signalling a contraction of the future development pipeline. The view into 2025 As this year progresses, Glenigan expects construction starts across the private housing sector to grow by 13% when compared with last year, with build-to-rent and small and medium-sized enterprise-focused initiatives broadening development activity. Retail projects, while modestly forecast to grow by 1%, are set to benefit from a more positive economic outlook. The hospitality industry is also poised for a revival, with Glenigan predicting a 6% increase in hotel and leisure construction starts boosted by projects like the £250m Therme UK development in Manchester.  Office developments are on track for an 18% growth in starts this year when compared with 2024. Allan Wilen, economic director at Glenigan, said: “While 2024 brought challenges, the construction sector demonstrated remarkable resilience. Despite budget constraints and concerns over tax changes dampening growth in late 2024, the outlook for 2025 is positive. “Increased government and household spending, as projected by the OBR, will likely provide a much-needed boost across key construction sectors, particularly private housing, retail, and leisure. “This broad-based growth presents opportunities for contractors to capitalise on emerging trends, especially as major investments in infrastructure, education, and health gain momentum. With resilience and adaptability, the industry is well-positioned to meet these demands and thrive in 2025.” Photo © Shivendu Shukla/Unsplash