Chief operating officer says market is too risky
Mace has said it is scaling back the amount of residential jobs it will carry out in the future because the sector is too risky.
The contractor鈥檚 chief operating officer Gareth Lewis said residential was 鈥渢he hardest business to make money, the hardest business to satisfy clients, the hardest business to make a profit and engage a supply chain without hacking them all off鈥�.
Mace鈥檚 resi business, which recently completed turning Richard Seifert鈥檚 South Bank tower (pictured) on the south side of the river Thames at Blackfriars into luxury flats, has been running for 11 years and other jobs have included schemes at 3 Merchant Square in west London and Greenwich Square in south-east London which is due to complete next year.
鈥淔or us [Mace] we鈥檙e going to shrink our residential component,鈥� Lewis said, adding: 鈥淚t鈥檚 an absolutely overheated market and demand is huge. We want to concentrate on key clients.鈥�
Lewis made his comments at a seminar on procurement, organised by consultant Arcadis.
Richard Baldwin, head of development at developer Derwent London, said the steep rise in house prices had led to subcontractors wanting 鈥渁 slice of the cake鈥� when it came to residential development and increasing their prices which was impacting on contractors.
Lewis also revealed the firm has invested into an onsite factory at an unnamed scheme which is planning to pre-fabricate up to 85% of the project. He added the firm鈥檚 client had also pumped money into the facility which had seen productivity increase by 50% and put the job 10 weeks ahead of schedule.
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