The search for certainty

There is no shortage of ambition in construction and property at the moment. What is changing is the amount of evidence investors, developers and public-sector partners increasingly want before committing themselves to it.

Across this week's stories, certainty came in several different forms: established occupiers, long-term partnerships, strong locations and development models designed to respond to identifiable demand.

In London's office market, Endurance Land's appointment of Multiplex to deliver 99 City Road represents a significant vote of confidence in the upper end of the workplace sector. The 475,000 sq ft tower is moving towards construction despite all the questions that have surrounded offices since the pandemic, but it is doing so with a very specific proposition. This is not generic workspace. It is a highly serviced, technologically capable building aimed squarely at London's technology and innovation economy.

Endurance Land also has some evidence behind that strategy. Its recently completed Jahn Court and Brassworks buildings at Regent Quarter have been leased to OpenAI, providing a useful indication of the kind of occupier demand it hopes to capture at 99 City Road.

The lesson from London's office market continues to be that demand has not disappeared; it has become more selective.

Selectivity was equally apparent in Operational Living.

Last week, Unite Students set out plans to concentrate its portfolio around the UK's strongest universities while disposing of thousands of beds in markets it considers less attractive. This week, we saw the strategy translated into bricks and mortar with completion of its £185 million Hawthorne House development in Stratford.

The 719-bed scheme is already fully let ahead of the new academic year, with more than half of the accommodation supported by a multi-year agreement with University of the Arts London. It is difficult to imagine a clearer illustration of what Unite means when it talks about aligning itself with leading universities.

Arada London's proposed development in Peckham offers another version of the same story. Its plans combine 516 PBSA beds with 55 social rent homes on a 1.4-acre brownfield site, demonstrating how developers are looking beyond straightforward standalone student blocks when assembling schemes in constrained London locations.

Both projects suggest that enthusiasm for PBSA remains strong, but the sector is becoming more sophisticated about where and how new accommodation is delivered. Strong underlying student demand matters, but so too do university relationships, planning strategy, affordable housing and the ability to make intensive use of valuable urban land.

A similar emphasis on reducing uncertainty can be found in regeneration, although here the mechanism is long-term partnership rather than occupier demand.

Portsmouth City Council has selected ECF as preferred partner for City Centre North, a 13.25-hectare brownfield opportunity with capacity for up to 2,300 homes. Importantly, neither party is pretending that those homes will simply appear because a partnership has been announced. The next stage is about masterplanning, viability and establishing what can genuinely be delivered before progressing towards a formal Development Agreement.

Wakefield Council is taking an even earlier-stage approach in Castleford, appointing Muse as Strategic Regeneration Partner to help establish a long-term vision for the town before individual schemes are brought forward.

There is something encouraging about the realism of both announcements.

Large regeneration schemes are operating in a difficult environment. Construction remains expensive, housing viability is challenging and public finances are constrained. The response increasingly appears to be longer-term relationships between councils and experienced development partners, allowing projects to evolve as funding, market conditions and individual opportunities permit.

That may lack the immediate impact of unveiling a fully formed billion-pound masterplan, but it could ultimately prove a more credible route to delivery.

Across all five stories, therefore, the common denominator is not simply investment. It is confidence backed by something tangible.

For Endurance Land, that is demand for premium technology-focused workspace. For Unite, it is a fully-let building and a long-term university relationship. For Arada, it is a mixed residential model on scarce London brownfield land. And for Portsmouth and Castleford, it is the decision to build long-term development partnerships before promising precisely what will be delivered.

In a market where finance remains selective and development risk is being scrutinised closely, ambition alone is no longer enough.

Increasingly, the projects moving forward are the ones that can demonstrate why they should.

One to Watch:  University-linked PBSA. Unite's Hawthorne House provides a particularly clear example of where the student accommodation market appears to be heading. With more than half its rooms supported by a multi-year agreement with University of the Arts London and the development fully let before opening, direct alignment between accommodation providers and strong universities could become increasingly valuable as investors become more selective about higher education markets.

Risk Radar:  Regeneration viability. Portsmouth and Castleford both have substantial ambitions, but neither announcement should be mistaken for construction starting. The difficult work now begins: establishing viable projects capable of attracting funding and surviving current development economics. The growth of long-term council-development partnerships may be part of the solution, but their success will ultimately be judged by how much of the ambition makes it onto site.