How do our customers cope with this? In the private sector many of the leading office, industrial and build-to-rent developers, with whom we enjoy repeat relationships, are having to re-visit the initial appraisals they made when purchasing sites and fundamentally reassessing their calculations.
Some developers make excellent returns when buying sites at the bottom of the market and then building during a strong leasing and sales environment, but the opposite can also be true.
We liaise closely with our existing supply chain on a daily basis to fully understand and even foresee potential issues. This proactive approach has allowed us to review and agree potential mitigation measures with our customers.
We have been able to schedule out key risks and produce action plans on a package-by package basis, identifying opportunities to offer advance commitments to secure early manufacturing slots or to secure materials on long lead-in periods. We have also procured off-site storage facilities where appropriate to protect against potential delays to delivery dates.
From our experience, the best outcomes are achieved by reviewing and managing inflationary risk jointly with our customers.
Many developers are having to revisit their initial appraisals when purchasing sites.
We have implemented a robust management and monitoring process on all our projects, ensuring that we continually track current and future materials and labour availability, and then empowering the site teams to take the necessary actions to secure these resources for the benefit of the project by agreement with our customers. Our supply chain is carefully selected by our procurement director and senior members of our regional management teams, from a list of tried and tested subcontract partners and specialist suppliers.