Written by Jason Tema, Director at Clearview Developments
At the time of writing this article, construction sites are slowly reopening, enabling hundreds of builders to return to work. Whilst this is good news, we must now take the time to reflect on the impact that COVID-19 has had on our construction sites so far.
One of the key issues for the construction sector has been the interruption to the supply chain; this was particularly the case for SME developers. Whilst larger construction sites often have sufficient material onsite to continue the building work as quickly as possible, SME projects tend to require a more careful approach to Supply Chain Management. Not only are the elements of smaller projects of a more boutique nature, they also tend to require lower material quantities compared to large scale developers.
A small mistake in the supply chain calculation could carry a wave of consequences for the SME project’s quality as well as ROI. Although it would be unthinkable for a responsible SME to not stick to the site’s construction time plan, the temporary closing of key suppliers made this almost impossible over the past few months.
Some suppliers suggested that although they can’t deliver right now, orders should be placed and payments made straight away to secure a timely delivery once the material becomes available. Again, this is a risky undertaking, should the supplier file for insolvency in the meantime. The avalanche effect could result in the site running into financial difficulties and even risk staff’s jobs.
To avoid our construction sites coming to a complete halt, forcing to furlough our staff, Clearview Developments instead chose to adjust our strategy and tackle smaller jobs onsite. In addition, we sourced independent suppliers of building material, which can of course only be a temporary measure to avoid an explosion of our budget.
Just like the rest of the building community, we are relieved that we can return to our sites again and key suppliers including Travis Perkins are open, however, we are equally concerned what impact a potential second wave of the corona virus could have on our supply chain.
Indeed, Turner & Townsend’s UK market intelligence report (UKMI) released on 30 April has warned the construction industry to adopt flexible strategies and prepare for the risk of supplier insolvency, material shortages and contract liabilities as the industry prepares to get back to work. Furthermore, Turner & Townsend advises construction firms to support supply chains but stay alert for any signs of distress to be able to move quickly, change strategy and protect projects.
Jason Tema is Director at Clearview Developments. Formed in early 2018, Clearview Developments is a young and ambitious property developer with an in-house build arm (June Construction) and an asset management arm (Clearview Properties) for its build to rent stock. With headquarters in Redhill, the team specialises in securing land, obtaining planning and the realisation of high-end residential developments for sale and rent in commuter hotspots such as Surrey and Kent. As a boutique developer, Clearview
Developments’ key objective is to make a difference to the UK’s regional housing markets by creating quality homes with high-specification premium finishes that are anything but box standard. As such, all of Clearview Developments’ properties come with a five-year developer warranty as opposed to the standard 2-years, in addition to a 10-year structural.
Having already grown organically with a GDV in excess of £14million, Clearview Developments’ current portfolio includes a selection of highly sought-after residential developments, including The Old Bank in Tunbridge Wells and Bargate House in Guildford.
