The post Read the Latest News on Lendlease’s Domestic Results, Redeveloping Castle Hill Primary School in UK, Extended Warranty Terms Affect Construction Processes, and UK Builders Start 2 Gw Subsea HVDC Cable appeared first on UK Construction Blog.
In today’s news, it has been decided upon by the Australian corporation that it will sell up its building projects in the United States and divest itself of its activities in the United Kingdom as part of a new strategy for commercial enterprise. In the meantime, as part of this plan, a cutting-edge school that complies with carbon neutrality standards will be constructed in order to accommodate future generations. In addition, discussions for the extension of structural warranties from ten to fifteen years are gathering steam, which is producing significant changes in the construction industry. A further point to consider is that the launching of the Eastern Green Link 1 project represents a significant milestone for the upgrading of the transmission network in the United Kingdom. Additionally, it is an important component of a larger strategy to encourage the deployment of renewable energy sources.
Lendlease’s Domestic Effort Yields Results
Original Source: Lendlease’s focus on domestic work begins to pay off
The Australian company has agreed to divest from its UK operations and sold off its building projects in the US as part of a new strategy. commercial enterprise.
The Australian construction and development company Lendlease seems to be turning a profit after a series of unsuccessful years.
Monday, the company announced a statutory profit for the first half of fiscal year 2025, which ended on December 31, 2024, of $48 million Australian dollars ($30.46 million). A statutory loss of AU$136 million was declared by Lendlease for the same time last year.
Lendlease announced in May 2024 that it will restructure its operations to concentrate on projects in Australia and withdraw from other building markets. That the transition is proceeding according to plan was stated by CEO Tony Lombardo on Monday’s earnings call.
On the call, Lombardo boasted about how the business had simplified itself, reduced its risk profile, and recycled money to become a more focused organisation in less than nine months.
During the first half of the year, the company sold its U.S. construction business and mostly wrapped up its divestiture of its overseas construction activities. Consigli Building Group of Milford, Massachusetts, announced in September that it had completed the acquisition of a large portion of Lendlease’s U.S. portfolio.
Consigli acquired 45 projects, including those in the planning, building, and final stages, with a combined worth of approximately $1.8 billion; however, the exact amount was not released. The bulk of Lendlease’s U.S. workforce—400 people—also made the switch to Consigli.
Then, just one day into its second quarter, in January, Lendlease revealed that it had finalised a deal to sell its UK property. selling their construction company to Atlas Holdings, a private equity corporation located in Greenwich, Connecticut.
When looking at the stats
Due to Lendlease’s completion of significant projects in 2024 and the delayed receipt of funds from other projects, construction revenue fell 18% during the period, according to Lombardo’s Monday report.
Supply chain problems, the COVID-19 epidemic, and subcontractor insolvency have adversely affected Lendlease’s construction revenues over the past five years, according to Lombardo.
According to Lombardo, “it is disappointing in the period to experience losses predominantly on two projects” (which were granted in the 2020 to 2021 time frame and were fixed price works), and these headwinds will persist until FY25.
He added that the initiatives were financially unsuccessful due of the escalating expense of materials. Since the contractor has shifted its strategy and is no longer interested in similar projects, Lombardo expressed optimism about the future.
In the second half of FY25, he predicted that building will be profitable again.
Redeveloping Castle Hill Primary School in UK with Galliford Try
Original Source: Galliford Try selected for Castle Hill Primary School redevelopment in UK
As part of this initiative, a state-of-the-art carbon-neutral school will be built to accommodate generations to come.
Todmorden, Calderdale, UK’s Castle Hill Primary School will be redeveloped by construction giant Galliford Try’s Building North West division.
The School Rebuilding Programme is a component of the DfE Construction Framework 2021, which awarded the project.
As a result, a state-of-the-art school that is Net Zero Carbon in Operation will be built to accommodate generations to come.
Bringing all pupils together under one roof, the proposal entails constructing a single, “state-of-the-art” structure to replace the existing two-block school.
Level access will be provided across the whole site of the new school, with an emphasis on accommodating students with mobility issues both inside and outside the building.
The refurbishment is in line with the Department for Education’s objective of establishing “Schools for a Better Future,” which echoes the school’s mission of “Building Independence, Broadening Horizons, Brightening Futures”.
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Preserving the site’s legacy while creating a sustainable learning space, the new school’s design takes influence from the original Victorian Castle Hill School.
Darren Parker, managing director of Galliford Try Building North West, expressed his joy at collaborating with the Department for Education on this monumental project that will transform Castle Hill Primary School. In order to make a positive and long-lasting influence for future generations, our main goal is to construct a sustainable building that is of high quality that caters to the needs of students, faculty, and the community at large.
The Defence Infrastructure Organisation in the United Kingdom recently granted Galliford Try a contract worth £65 million ($81.2 million) to build single living quarters at Royal Air Force Digby in Lincolnshire, England.
Two contracts in London totalling £86 million were secured in December 2024 by Galliford Try’s Building London and South East Commercial company.
Extended Warranty Terms Affect Construction Processes
Original Source: The impact of extended warranty periods on construction practices
Discussions on increasing structural warranties from 10 to 15 years are gaining momentum, which is causing major changes in the building industry.
There will be far-reaching effects on building quality, contractor duties, and total project expenses as a result of this planned extension of structural guarantees. Proponents of longer guarantee periods say they boost responsibility and consumer confidence, but experts in the field are worried about the operational and financial consequences for developers and builders.
Improving building standards
The possibility for an increase in building quality is one of the main advantages of extending structural guarantees. Developers and builders are more likely to use high-quality materials and adhere strictly to building codes when the guarantee duration is extended. Contractors are incentivised to improve their construction procedures in order to minimise flaws and the possibility of warranty claims due to the additional five years of obligation.
Investment in innovative and long-lasting construction materials may be encouraged by longer warranties. Modern building methods, like prefabrication and modular construction, are well-known for their accuracy and quality control; their use is expected to rise in response to the demand for structures with longer lifespans.
Expanded duties for contractors
While developers and homeowners alike reap the rewards of higher-quality construction, contractors bear the brunt of the extra work that comes with longer guarantee periods. In order to keep track of all the materials, procedures, and subcontractors’ work for the duration of the 15-year warranty, builders are required to keep meticulous documents. In order to safeguard against potential claims, this entails more comprehensive documentation, more inspections, and higher insurance coverage.
More stringent inspections of contractors’ work might force them to increase spending on quality control teams and monitoring after the fact. Smaller construction companies may not have the financial wherewithal to handle long-term obligations, such as the necessity to respond to warranty claims and conduct ongoing maintenance.
The project’s budget and potential expenses
There will be an effect on project budgets due to a longer warranty. More testing and improved quality control techniques are two risk mitigation strategies that builders may need to implement, which could increase the initial cost. Overhead costs could rise due to the necessity of additional insurance coverage and the possibility of legal fees connected with warranty claims.
Developers may decide to increase property prices to cover these additional expenditures. Nevertheless, the potential advantages of decreased maintenance expenses and fewer structural failures in the long run could make extended warranties a worthwhile investment for builders and homeowners alike.
Concerns and responses from the industry
Stakeholders in the sector have expressed a range of opinions regarding the plan to extend structural guarantees. Homeowners and consumer advocacy groups are pleased with the shift because they believe it would raise construction standards and make people safer from building defects. However, the financial risks and additional regulatory load are concerns for many insurers and construction enterprises.
A major obstacle could be the possible increase in warranty claims. Contractors and insurers face a greater challenge in conducting accurate risk assessments due to the longer warranties, which require them to foresee concerns that may surface years after the project is completed. Another concern among builders is that extended liability would discourage new competitors from entering the market, which could lead to less innovation and less competition overall.
In summary
A major change in the building business is the decision to increase structural warranties from 10 to 15 years. It brings new operational and financial issues for developers and builders, but it also encourages higher quality and customer confidence. To ensure the initiative’s long-term viability, it will be crucial to strike a balance between improved protection and sustainable economic practices.
UK Builders Start 2 GW Subsea HVDC Cable
Original Source: Construction begins on 2 GW subsea HVDC cable in the UK
The Eastern Green Link 1 project’s groundbreaking marks a significant achievement for the UK’s transmission network upgrades and is an important part of a broader strategy to encourage the deployment of renewable energy sources.
A 2 GW, 525 kV high voltage direct-current (HVDC) cable connecting Scotland and England has commenced construction. This transmission infrastructure piece is anticipated to facilitate the deployment of renewable energy sources in the UK.
When finished, Eastern Green Link 1 (EGL1) will connect Torness, which is close to Edinburgh, and Hawthorn Pit, which is in County Durham, northeast England, using about 400 km of HVDC cable along a 190 km path. Prysmian Group, an Italian cabling business, was awarded the contract to supply EGL1 with its cable in late 2023.
National Grid Electricity Transmission and SP Energy Networks, proprietors of the transmission network, are collaborating on the development of the GBP 2.5 billion ($3.15 billion) project. Onshore work will commence construction in the spring of 2025, with offshore installation following in the summer.
Selected to design and supply HVDC converter stations at both ends of the line are Metlen Energy & Metals and GE Vernova’s Grid Solutions, who make energy equipment.
The executive director of M Power Projects at Metlen, Kostas Chorinos, issued a statement praising the groundbreaking and expressing the company’s desire for local people to reap the benefits of EGL1. “The local supply chain will be receiving millions of dollars in investment,” Chorinos announced. “Hundreds of jobs will be created for local people, and our workforce will be volunteering thousands of hours within local communities.”
After Eastern Green Link 2 (EGL2) work began in August 2024, EGL1 construction will begin in September 2024. Peterhead in northeast Scotland and Yorkshire, England are connected via a 505 km, 525 kV, 2 GW HVDC cable as part of the EGL2 project. Renewable energy sources are expected to be bolstered by the construction of new transmission links connecting the north of the country, which is abundant in renewable energy, to the south, which has high energy demand.
Both EGL3 and EGL4 are high-voltage direct current (HVDC) projects in the United Kingdom that aim to connect England and Scotland over the North Sea. The UK government’s national infrastructure project planning site anticipates a combined planning application for the two projects in the summer of 2026.
Summary of today’s construction news
Overall, we discussed Lendlease, an Australian construction and development firm, which appears to be finally breaking even after a string of bad years. On Monday, the business revealed a statutory profit of $48 million ($30.46 million) for the first half of fiscal year 2025, which concluded on December 31, 2024. Last year at this time, Lendlease reported a statutory loss of AU$136 million. At the same time, the Building North West subsidiary of construction giant Galliford Try will be redeveloping Castle Hill Primary School in Toddmorden, Calderdale, UK. The awarding body, the DfE Construction Framework 2021, is a part of the School Rebuilding Programme. Moreover, this anticipated extension of structural guarantees will have far-reaching impacts on building quality, contractor obligations, and total project expenditures. Developers and builders are concerned about the operational and financial ramifications for lengthier guarantee periods, while proponents argue that they improve consumer confidence and responsibility. The building of a 2 GW, 525 kV HVDC cable that will link Scotland and England has also begun. Renewable energy sources are expected to be more easily deployed in the UK with the help of this transmission infrastructure element. Using around 400 km of HVDC cable along a 190 km course, Eastern Green Link 1 (EGL1) will eventually link Torness, near Edinburgh, with Hawthorn Pit, in County Durham, northeast England. In late 2023, EGL1 was awarded the contract to deliver its cable by Prysmian Group, an Italian cabling corporation.
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