Mark Merritt, the Director of Development Monitoring, reflects on his first year (2023) at Project and Building Consultancy (PBC) and outlines his predictions for the upcoming year that will directly affect his clients and his department in 2024. Mark’s appointment was to lead the newly formed Development Monitoring team, with a mandate to increase PBC’s current client base and centralise the department.
An Overview of Development Monitoring in 2023
“In many respects, it has been a good year, as we have successfully expanded our client base, whilst continuing to deliver excellence to our existing clients.”
Traditionally, Development Monitoring have monitored residential schemes, with some mixed-use, commercial and industrial, however, in the last couple of years Mark has seen an upturn in Purpose Built Student Accommodation (PBSA). Mark said that the Development Monitoring team prides itself on their ability to monitor these schemes, successfully completing 2 in the last year, with a further 3 either on site or about to start on site.
Mark has noticed a reduction in new development deals across the board. There has been a “perfect storm” impacting the viability of schemes – construction costs are significantly up on 2 years ago, the cost of borrowing is 5% more expensive than at the end of 2021, end sales are flat and land prices to date have remained high.
Opportunities for 2024
“There are signs of green shoots of recovery. Land prices are reportedly starting to fall which is seeing some of the schemes that were previously not viable, starting to look achievable.”
Whilst interest rates remain higher than they were 18 months ago, they have stabilised. giving more certainty to developers over their cost of borrowing. Additionally, a lack of development in certain sectors, has meant that the supply chain is seeking work and are therefore more competitive. A Developer recently spoke to Mark about material costs being reduced as some suppliers have a surplus of materials and are offering discounts to reduce their stock. Mark adds that If we consider lower land prices, more competitive tender prices and stabilised interest rates, schemes that have been on hold, may now be able to proceed.
Market Predictions in 2024
“I think it will continue to be a slow start, but come Q2 / Q3, with further stabilised interest rates and tender prices being more competitive, along with possible lower land prices, I think we will see an upturn in schemes proceeding. I am therefore confident that in the latter half of 2024, we will see more development deals proceeding.”
To learn more or make an enquiry, please contact Mark Merritt, Director of the Development Monitoring Team.
To view Development Monitoring’s past work, click here.
