The launch of Herzog & de Meuron’s major new 58-storey apartment block in Canary Wharf, One Park Drive, was somewhat overshadowed by some fairly stark words on Brexit from Sir George Iacobescu, chairman of developer Canary Wharf Group.
Speaking after Theresa May fired the Article 50 starting gun for what’s sure to be a torrid two year race, he said that the UK construction industry would need to start producing its own labour and materials in big numbers to counter “serious inflation costs” resulting from a weak pound. Iacobescu also said that contractors who are tied into guaranteed maximum price contractors signed before June 2016’s vote have seen losses on schemes they were expecting to make a profit on, which can’t be good for anyone.
He said that around 60 to 70 per cent of materials, from cladding to steel to rebar, comes from overseas, and the UK “has to become more self-sufficient.” With contractors now suffering from this inflation in import costs they are naturally increasing their prices, with the compounding factor of potential further labour shortages. According to this influential developer, contractors have been guilty of relying too much on overseas labour, and leaving the EU will be a rude awakening that will force them to train UK staff up.
The 483-apartment scheme at Canary Wharf, the first residential development by the Swiss practice in the UK, is a striking cylinder made of projecting glazed boxes which will stand out among the Docklands monoliths. However the bottom line is that its build costs have increased by 15 per cent since the Brexit vote.
The GLA has published a report that confirms just how big a contribution the architecture sector makes to London’s economy, to the tune of generating £1.7bn per year for the city – and this is growing by over 7 per cent every year. Launched at Mipim, the report shows how crucial the profession is in economic terms, but also contains the key fact that a third of architects in London are non-UK nationals, and most of those are from the EU.
London’s deputy mayor Jules Pipe might have been optimistic at Mipim saying that London “will come through” Brexit, pointing to the fact that Google, Facebook and Apple are all consolidating their presence in the city. However ensuring the continued income generation for the UK which the architecture sector has shown means ensuring that these professionals’ future is secured in the capital – this has to be a priority.