Heron tower builder says it ‘remains commited’ to market but adds there are others beyond the capital
Skanska is reducing its exposure to the London commercial market under a new strategy drawn up by building boss Terry Muckian.
Building understands Muckian, who took over from Steve Holbrook – now the managing director of Wates’ London construction business – has told clients and consultants that the firm is planning to limit its work on London commercial schemes at any one time to two contracts at pre-contract stage, two on site and two which are close to completing.
One source said: “They told us they want to reduce their risk, they don’t think the margins are there. They’re looking at other sectors like defence, hospitals, public sector work.”
The source added: “It’s a shame, they’re a very good builder. It just limits the pool [of builders] that bit more. We might have to look at Tier 2s for the work or different procurement routes.”
Skanska, which has built several of the City’s landmarks over the years including the Gherkin and Heron tower, is set to redevelop Hill House near Fleet Street under a £250m deal for Landsec while it is also working on British Land’s 1 Appold Street scheme at Broadgate in the City.
In a statement, Skanska said: “We remain committed to the London commercial market. Our market position in the capital is strong, with a number of projects under construction and in advanced stages of development.”
But it added: “We have built a robust and versatile business offering by diversifying into other sectors and looking beyond London. This adaptability drives superior service for our customers, allows us to retain and attract the very best talent and ensures skills are shared across the nation to benefit project delivery.”
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The news comes as confidence in who will bid big ticket commercial schemes in London is being strained.
Earlier this week, London cost consultant Core Five said it still had worries over capacity – despite the news that Lendlease, which has traditionally been relied upon to price big London schemes, is being bought by US private equity firm Atlas Holdings and renamed Bovis.
Most of the recent high-profile schemes let under design and build have been tendered by just two firms – Mace and Multiplex.
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