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May 2005 – Developers are supersizing sheds

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The market for sheds has been buoyant in recent years and is the lifeblood for more than a few steelwork specialists.  Demand in this sector is driven primarily by the changing needs of distributors and logistics companies and has offset the long, slow fall in demand for production facilities as UK manufacturing declines.

The market is growing and the sheds themselves are getting bigger. Five years ago 100,000 sq ft was regarded as large. Today, Sainsbury’s plans a group of 700,000 sq ft sheds around the M25; Debenhams and B&Q have 750,000 sq ft projects on the go; in North America 1,000,000 sq ft distribution facilities are not uncommon and that size of shed is said to be coming to the UK.

Clients for sheds are getting bigger as well. Last year Gazeley developed some 10 million sq ft of warehouses. The biggest user of steel in Europe, after three major car manufacturers, is ProLogis, some of whose projects are mentioned in our sheds feature in this issue. Clients like ProLogis owe their growth to the fact that the supply chains of global companies are undergoing fundamental structural change and outsourcing of warehousing and distribution is a strategic business decision for many.

Although sheds in the past may not have been regarded as the most sophisticated structures to design or build, their complexity grows with size. Among the benefits of mega-sized facilities is that they can incorporate the latest innovations in warehouse design, layout, and management systems that reduce the need for costly automated materials handling systems. This means steelwork specialists have to keep abreast of the latest client needs.

Up to 75% of the sheds market is calculated to be speculative, so the construction team has to be able to build fast to allow developers to capture the opportunities they have spotted. Steel has this market virtually to itself and as the pressures grow from demanding clients it is hard to see things changing anytime soon.

Housebuilders must discover steel

At a BCSA-Corus residential seminar in London (see Analysis, click here) in April Bourne Steel Chairman David Sands confidently told the specially invited audience of some 100 developers: “Steel is the best discovery that could be made by the residential sector.” The use of steel in the low rise sector could become as popular as it is with the high rise developers if only the message about steel’s benefits was more widely understood, he argued

Let’s hope the government is listening. Exactly how the government will deliver on its ambitious plans for housebuilding, or how the construction industry will respond to its demands for a £60,000 house, are not fully clear. What is already obvious is that traditional wet trade approaches are not going to be up to the task and that steel will have to play a far greater role in providing housing than in the past.

There is a role for both hot and cold rolled steel in this and the steel sector has proven in recent years that it is more than ready to meet the challenge. Developers of prestige projects up and down the UK have acknowledged the advantages of building high rise in steel. The advance in market share has been dramatic, as the recent market shares survey from Construction Markets showed. As we saw in NSC in March, major investments are being made in off-site techniques and there is now a Steel Homes Group under the umbrella of the Steel Construction Institute. The steel sector is ready to meet the challenge for both high rise and low rise housing; the next step is to be sure that the housebuilding sector gets the message.

Nick Barrett

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