During times of crisis or upheaval, many of us will have heard or uttered something along these lines in an attempt to offer reassurance: ‘Change isn’t always a bad thing.’
And it’s true. There’s always a lesson to be learned from a failure and an opportunity to be seized during difficult moments.
And when businesses go through change, those that help facilitate it will naturally benefit too.
There is one segment of the construction industry that routinely profits from any increase in businesses facing major upheaval: the commercial fit-out market.
As fit-out contractor Morgan Lovell’s MD Colin Allan told CN recently: “We cover any business that goes through a degree of business change,” adding that such changes “drive most of our projects”.
He cited sharp growth and leadership changes among the factors that underpin fit-out work. “It can come in a declining market as well, where businesses need to re-evaluate themselves and change to suit another market or another route,” he added.
Projects covering less than 50,000 sq ft jobs are a core market in this segment.
ISG took steps to secure some of this small-scale pie in 2016 with the launch of subsidiary Agility, which has grown to become a £80m-turnover business in two years.
Of course, ISG was already established in the wider fit-out sector, so Agility did not start from scratch. Nevertheless, putting together an offering focused on the sub-50,000 market appears to be paying dividends.
Today we saw the latest salvo in the fit-out war, as Mace announced a new look and a new leader for its own subsidiary.
The contractor has rebranded its Como fit-out business as Mace Interiors, with the stated goal of better alignment with its corporate brand.
But is that all there is to it?
The fact Mace has nabbed fit-out rival Overbury’s long-serving commercial manager to lead its Interiors arm suggests this is more than a new logo.
New orders in the commercial offices sector were only £0.8bn in Q2 2018, compared with £1.6bn two years earlier in the quarter before the EU referendum, according to the Construction Products Association.
However, Knight Frank reported in August that leasing of offices in London was “robust in Q2 2018, reaching 3.39 m sq ft, which is 7 per cent ahead of the long-term average”.
“In fact, only one H1 in the last 10 years has seen a higher volume of leasing activity,” Knight Frank added.
It would appear that, while the pipeline for brand new offices has declined, demand for existing stock is reaching record levels – and with this comes more fit-out work.
Against this backdrop, Mace’s move looks set to ratchet up the intensity of an already competitive market.