Commercial remodelling sector defies economic uncertainty

The UK’s commercial property remodelling market is set to continue its strong post-pandemic bounce back with 2023 revenue forecast to maintain last year’s strong upward trend, according to new analysis by Sirius Property Finance.

Previous research from Sirius revealed that the UK’s commercial construction market is forecast to grow by 2.8% by the end of 2023, reaching total market revenue of £19.21 billion for the year.

Now, Sirius Property Finance has looked at the market size, based on annual revenue, of the commercial remodelling market - which covers works such as renovations, alterations, retrofit, maintenance, and repair work - with the data suggesting that that many commercial developers are looking to revamp rather than build new in order to keep costs down in the face of uncertain market conditions.

Alongside much of the construction industry, the UK commercial remodelling market took a hit during the pandemic, with revenue falling by 2.7% in 2020 and a further 17% in 2021 at which point annual revenue hit a low of £4.5 billion.

But in 2022, the market saw a significant bounce back with revenue increasing by 23% to reach £5.6 billion.

Now the data is forecasting that by the end of 2023, the market will have grown by a further 4.2% resulting in annual revenue of £5.8 billion, its highest since 2018.

Head of corporate partnerships at Sirius Property Finance, Kimberley Gates, commented: “As we’ve shown with previous research, the commercial construction sector is performing well in a difficult economic environment. But at the same time, developers are still looking for ways to keep costs down where possible.

"That’s why we’re seeing the remodelling market perform so well at this difficult time - older buildings can be transformed into revitalised assets at a relatively lower cost than building from scratch.

"With so many commercial buildings in need of a bit of TLC in the UK, a focus on remodelling rather than building is a brilliant way of making the most of the nation’s existing commercial heritage while simultaneously future-proofing the sector.”