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Positive future for fit-out

The fit-out market is one of the last to pick up as recession recedes, but it also remains steady during downturns too.

The sector has a two-pronged relationship with the construction downturn. On the one hand, it is one of the final trades to work on a new building and therefore one of the last beneficiaries of an upturn in work.

On the other, clients may choose to re-fit their existing buildings rather than buy new ones when money is tight or new buildings are scarce.

Some fit-out firms are seeing an upturn in work – both new-build and refurbishment – and are starting to hire more staff to meet the demand.

Recent upturn

Como, the fit-out arm of contractor Mace, is starting to take on more workers.

Como business unit director Trevor Bacon says: “We are recruiting. The market has picked up in the last three to four months.

“We have seen some new-build come to market in category A and B fit-out and we are seeing a number of clients come to market with an end of lease and they are looking to do some refurbishment.”

Category A fit-out is the level that developers undertake before supplying a building to an occupier, such as fitting suspended ceilings, while category B is the extra work occupiers undertake such as installing kitchens, a reception area and IT.  

Transferrable skills sought

Mr Bacon says his firm is recruiting for all types of roles, including both graduates and people with a trade background.

Como tends to work on projects of about £500,000 to £100m and is interested in people with experience on office fit-out projects of all sizes and with transferable skills gained in other parts of construction.

“London is where the buoyancy is but that is spreading to some other regions as well”

Trevor Bacon, Como

“There’s a synergy between the shell and core major projects and fit-out, between how we look at retail and commercial fit-out,” he says.

Mr Bacon adds that there is now more category A work for speculative offices. The numbers of such jobs dipped in the downturn, as developers could not get the finance for speculative projects as opposed to ones that were pre-let.

However, funding seems to be becoming more available, according to the Deloitte London Crane Survey.

Regional ripple

Como mainly works in London and the South-east, as well as having an office in Birmingham.

Mr Bacon says some clients outside London have talked about recommencing work on offices that had been on hold. “London is where the buoyancy is but that is spreading to some other regions as well,” he says.

He says the office-occupier market is not just about the technology and media firms that have dominated recently; sectors that were traditionally major players including insurance, legal and banking have started to come back into the market.

While he has noticed an increase in new-build work, Mr Bacon says the balance between new-build and refurbishment is likely to change in the next few years.

The number of new buildings being completed in 2015 will drop temporarily because, as the Deloitte London Crane Survey found, there was a drop in the number of projects started a few years earlier as the economy stalled.

Accordingly, fit-out work in the medium term will be focused on category B jobs until new properties, which need a category A fit-out, start coming onto the market again.

The move towards office spaces that allow collaborative and flexible working could also prompt more clients to re-fit their buildings, he adds.

ISG drive

ISG, which does retail as well as office fit-out, plans to create 100 new roles this financial year in anticipation of growth returning to its major regional markets and to keep pace with a resurgence of office refurbishment work.

Matt Blowers, managing director of ISG UK’s fit-out business, says the company is recruiting at all levels of seniority and in a variety of roles.

He says for some roles the firm is “not necessarily looking for the finished article” but people who have a good attitude and are willing to learn.

“Office fit-out is always one of the first barometers of whether work is picking up. The fact there is buoyancy is encouraging for the industry generally”

Trevor Bacon, Como

There are a significant number of new-build fit-out projects and a strong pipeline of office schemes, he adds. “As confidence returns to the London fit-out market, this is rippling out from the capital to key conurbations where we are seeing increasing opportunities.

“A crucial growth area for the business is the global data centre market, where our continuing success is driving overseas working opportunities for our staff, as well as an increasing volume of technically complex fit-out schemes within the R&D and healthcare sectors.”

Mr Blowers says recruitment for data centre work covers all jobs but especially on technical skills including structural, mechanical and electrical engineering roles.

Both Mr Bacon and Mr Blowers are positive about the future prospects of the fit-out market.

“There is more optimism than there has been for many years,” Mr Bacon says. “That is across a number of sectors, but you can see it in the way work is starting on site.

“Office fit-out is always one of the first barometers of whether work is picking up. The fact there is buoyancy in the market is encouraging for the industry generally.”

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