Construction companies and developers optimistic they can get Edinburgh building again after Covid-19

Building work has restarted at several high profile sites across the Capital as the construction industry begins its recovery from the coronavirus crisis.

Building work resumes on the site of St James Centre Development

For decades the pace of development in Edinburgh has been stuck at one speed; fast.

Bar slowdowns following the damaging recession brought on by the collapse of the financial markets in 2008 and 2009, development of the city has continued to grow at a pace.

However, with the ongoing impact of Covid-19 providing the potential threat of another damaging period of retraction in the sector, Edinburgh’s construction is keen to restart with many in the sector viewing the lockdown as a pause rather than an existential threat.

Workers on the Parabola site at Edinburgh Park (Photo: Andy J Mather)

Several significant developments in the city in high profile locations such as the new St James Centre, The Haymarket development at the former goods yard on Morrison Street and the Johnnie Walker Experience in the former House of Fraser site have all restarted work, albeit scaled back compared to pre-Covid-19.

The construction sector as a whole is working to its own phasing, set out by the Scottish Government, with the industry set to move into phase three today.

It means more workers, up to around 30 to 40 per cent, will be allowed on site while still adhering to social distancing guidelines following several weeks of enabling work and essential construction.

The news was greeted positively by much of the construction industry including Tony Hordon, managing director of Parabola who own 43 acres of undeveloped land to the south of the existing Edinburgh Park.

Building work resumes on the site of St James Centre Development

Parabola’s first phase of construction began at the end of last year, and Mr Hordon welcomed the restart of the sector in Scotland.

He said: “We welcome the news that the construction sector has been given the green light to get back to work, it is incredibly important from a Scotland point of view. Any construction contract depends on having the right team in the right place at the right time.

“In England, many of the sites are well ahead and there is a risk that contractors may lose labour to south of the border where the work is. Once they’ve gone it would be hard to get them back.

“We been on site for a few weeks already to ensure safety protocols are in place ready for construction work recommencing on the building next week.

“Although we have lost ground on our development programme, the impact for Parabola is probably less than other developers are experiencing as we are early on in our programme and have the opportunity to hopefully make up some ground.

“The risk profile of an outdoor site like Edinburgh Park from Covid-19 is far lower than others where people have to work within a building.”

Mr Hordon added that he believed the industry would recover, with demand for office space and new housing unlikely to disappear overnight.

He said: “I believe the industry is robust enough to recover, and demand in Edinburgh is strong for both residential and commercial construction.

“As we return to a new normal, businesses will always need the office, as it’s the ‘mothership’. A business will still need office space to promote and instil their brand, and attract the talent. Its where people collaborate, and where careers will develop.

“Despite lockdown we have still been able to launch our building. A launch done on a virtual basis, and therefore a little different to the norm, but perhaps more importantly, it has been well received and we have had an encouraging number of enquiries already.

“A blend of working from home and the office may become more acceptable”

Charles Harte, project director for Gleneagles who are midway through the process of constructing a luxury hotel in the former Bank of Scotland premises on St Andrew Square, said it was crucial the sector looked to the future.

He said: “We have to look to the future and ask how do you get people back to being excited about St Andrew Square and be excited by the Edinburgh St James and the offering in that area.

“It is now a question of getting the economy back on track and people feeling confident to visit these places.

“Everyone is in the same boat with the delays, but the impact is that we have to respect social distancing but also look forward in a positive way.

“We will complete our development a bit later but we will still have a fantastic hotel destination and be part of a resurgence with employment opportunities and local spending.”

Mr Harte added the recovery from Covid-19 is not expected to be as tough as the climb out of the recession in 2008/09.

He said: “2008/09 was a financially stimulated crash. It meant available borrowing and costs were harder and confidence was very low.

“To me this is different, primarily because it is more a short sharp impact which will leave a very strong ripple, but we have seen people coming back to site with a real hunger and appetite.

“There is a lot of pride in going to work and making happen. We need to come back quicker, better and stronger and with less of a defeatist attitude. We have got a job to do but we are talking about how we solve those problems.

“The recovery may have the same length as 2008/09 but the attitude in construction is that we will act collaboratively to recover.”

Willie Lockhart, director of development for Scotland at Places for People who are behind the 337 home development at the former Engine Yard site on Shrubhill, echoed the general confidence despite the inevitable impact of Covid-19.

He said: “Of course, there has been a cost associated with the shutdown of our sites but we are not aware of any subcontractor or supply chain insolvencies. As we return to work this week it will be in a very different environment to when everyone was last on site.

“Production levels will build up gradually but may not reach previous capacity in the current financial year.

“This will have an impact on the construction programme and I would expect all involved will see some impact on their margin levels, but we think the industry is resilient and will recover over time.”

Unions fear for pay cuts and job losses

While the return to work has been greeted positively by many construction companies, those they employ are amongst those who will feel the longest and most severe impact of the Covid-19 crisis.

Unions across the country have already faced uphill battles to ensure all construction firms are adhering to strict social distancing with most larger firms complying, but smaller firms taking their chances.

For many workers the financial impact of the pandemic is still to come.

Graeme Turnbull, regional officer at Unite the Union, said many workers had seen their pay reduce to levels not seen for half a decade.

He said: “They are feeling it right now but some are just glad to get back to work but is a double edged sword because some of the guys are getting less than they were five years ago, but many don’t have any choice.

“Some of the guys have said they were better off on furlough and now they have gone back their bonus has been cut and they would be making the same sitting in the house rather than being out doing their work.

“Many are worried the changes to the furlough system will lead to job losses. The biggest fear is that when the change to 70 and 60 per cent government support happens, that is when the redundancies come.”

Fears over safety are prevalent too.

Mr Turnbull added: “There are concerns about certain two man jobs. Workers are having to work at close proximity and are getting paid less due to not being able to work as a team.”

Major Edinburgh construction sites restart

As government restrictions around construction work entered their next phase of easing today, sites across the city continued to ramp up their own work.

Edinburgh St James was among the first to confirm it had restarted work last week, while the Johnnie Walker Experience and The Haymarket both started to work following earlier easing.

Other major sites across the city are due to restart including the ongoing work at the old Royal Infirmary delivered by Edinburgh University, and construction at the £150m development at Craighouse, developed by the Qmile Group.

Qmile Group chief executive, Paul Curran, said: “All activity has been undertaken in accordance with the Scottish Government’s guidance on a phased return to construction work to ensure the health and safety of our colleagues, contractors, suppliers and visitors to our sites.

“We are also mindful that we have a responsibility to the local communities in which we are building. We have therefore put restrictions in place to limit the movement of site personnel and to minimise contact outside our developments.”

A spokesman for Edinburgh University said: “Work on a number of our estates projects is resuming, within guidelines set out by government.

“The development and maintenance of our buildings is key to providing the highest quality teaching, research and student experience.”

A Diageo spokesperson added: “Our first priority continues to be the health and safety of our people, partners and the local community.

“We are pleased that our construction partners are now able to restart work on the Johnnie Walker Princes Street development in line with government guidance and we look forward to resuming progress on this flagship tourism investment for Edinburgh and Scotland.”