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Skanska reaps commercial boost

CONTRACTS LEAGUE £275 million City of London deal with Minerva drives Anglo-Swedish giant into second place behind Balfour Beatty

SKANSKA is continuing its remorseless climb up the annual contractors' league as the revival in the commercial sector boosts the Anglo-Swedish giant's fortunes. Last month it sealed a £275 million deal with developer Minerva for an office redevelopment at Cannon Street in London.

Balfour Beatty took top spot in the contractor's top 50 for August after winning 20 more awards than second-placed Skanska.

The Minerva deal is a further sign that the upturn in the commercial sector is gaining pace.

Consultant Savills' PMI development activity index showed that new build office work was expanding at a faster rate than any of the nine sectors covered by the index. This is also translating into a rise in orders that is starting to transform the contracts leagues. According to Emap Glenigan, commercial orders hit a record high in August and this spending is showing up in the annual clients top 50.

Minerva has joined property development giant Land Securities, Liberty and Hammerson among the 10 h ighes t-spend ing cl ients over the 12 months to August 2006.

Another leading developer, London & Quadrant, is among the top 20 biggest spenders over the last year and is joined by commercial investment group Postel. Commercial developers also feature further down the annual clients top 50 with British Land, London & Regional and Castlemore all having let three or more contracts over the past year to warrant inclusion in the annual league.

Skanska is second in the commercial top 10, behind Bovis Lend Lease, but the real indication of the increase in commercial work is the number of projects being let. Instead of a handful of major projects propelling contractors into the top for this sector, every firm in the top 10 has won 10 or more contracts, apart from Skanska.

Bovis Lend Lease is also the biggest beneficiary in spending in the retail sector, where half of the top 10 contractors have won 10 or more cont racts.

This suggests that the crane count in London is not the only indicator of a rise in workload and that smaller, provincial commercial developments are also underpinning this sector's revival and continued inf luence on the contractor's annual top 50.