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Skanska MD points to supply chain after Land Securities 1&2 New Ludgate win

The head of Skanska’s London property arm has praised the firm’s in-house supply chain as a “huge positive” in winning work in the capital, as the firm celebrates a major City win.

Land Securities last week confirmed Skanska as the main contractor on a £260m mixed-use development in the City of London at 1&2 New Ludgate.

The £109m construction contract will start in August 2013 and complete in April 2015, aiming to deliver two office buildings with 379,000 sq ft of office and retail space to a BREEAM Excellent standard.

Skanska managing director Paul Heather said the company’s “internal JVs” gave the company a “unique advantage” in bidding for such contracts, adding that pre-construction work with both client and designer had given the firm the edge on Ludgate.

“The team have gone the extra mile to look at innovative ideas,” he said.

“We’ve worked with the supply chain to ensure we’ve de-risked the ground conditions, we’ve really looked into the building information modelling side on the roofing areas, and we’ve been able to work with our M&E company Skanska Rashleigh Weartherfoil.

“[Our internal supply chain companies are] right in with us from the start – that’s quite a unique sell in the London market.”

Skanska’s Ludgate win comes on the heels of a £200m Crossrail Bond Street contract in partnership with Costain, the redevelopment of 100 Cheapside, as well as its position as frontrunner the main contract on the £500m Scalpel skyscraper.

One of the Ludgate buildings will be five stories high, the other 10, and the contract also includes external works such as pavement widening and new public space.

“We’ve learned in the London and South-east market it’s very important to engage with the supply chain quickly,” Mr Heather said.

“It’s about working with them in the pre-construction period and then utilising all their expertise, not discarding them and moving on and looking again.”

Client focus:

Skanska has increased its client base in London over the past three to five years, singling out Land Securities, British Land and Minerva as key clients and GPE and Derwent London as those the firm has in its sights.

Skanska has also worked with Land Securities to deliver the Dashwood House and Queen Anne’s Gate projects in the capital.

“I think it’s important that we learn from our clients and in order to learn we should diversify,” Mr Heather said, adding that the commercial market in London was looking “buoyant going forward”.

This is particularly so in the heavy refurbishment market, as City offices engage in structural alterations.

“I think there’s opportunity to take existing stock in London and increase or refurb it to take it through the next decade or so,” he added. “Some of the landlords have seen that opportunity.”

And despite Skanska’s recent successes on high-profile schemes, Mr Heather is also keen to target smaller and mixed-use projects.

“We tend to get incorrectly badged that we’re only interested in major projects – that is not the case,” he said. “We’ve worked over the last few years to really send a message to our clients, [and] that will definitely continue.”

One of the areas the firm is working on is maintaining a workforce with both the flexibility and the personnel capacity to deliver on the major project pipeline while also targeting smaller and more varied work, Mr Heather explained.

Though he said there was “always room for additional staff”, he believed the firm had the right amount of people in the business to meet the current pipeline of work.

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