Geopolitical Risk and Procurement: Why Refurbishment Projects Are More Exposed Than You Think

The property and construction industry has never been immune to geopolitical events, but the past few years have brought that reality into sharp focus. The energy crisis triggered by the Russia-Ukraine conflict sent shockwaves through supply chains, drove material costs to historic highs, and left many projects exposed in ways that clients and their development management advisors simply hadn't anticipated. As tensions in the Middle East continue to escalate, the risk of further disruption is real and for those with refurbishment projects in the pipeline, the exposure is greater than most people realise.

What Happened Last Time

When Russia invaded Ukraine in February 2022, the immediate focus was on energy prices. But the procurement consequences ran much deeper, and in many cases took months to fully surface. The disruption wasn't a single shock, it was a series of trickle-down effects that caught projects off guard precisely because they weren't immediately obvious.

Lead times on specialist electrical components, including parts used in substations and power-on infrastructure stretched dramatically. But so did delivery schedules on structural steel, timber, insulation products and a range of finishing materials, as energy-intensive manufacturing processes across Europe became unviable or severely constrained.

Projects that appeared well-progressed suddenly found themselves stalled, waiting on components that nobody had flagged as a risk.

Part of the problem was visibility. Design teams could review specifications and explore alternatives at a high level, but the real detail sits further down the supply chain with the specialist subcontractors and manufacturers whose relationships are often held by the Main Contractor rather than the client or their advisors. By the time the issues became apparent, they were already embedded in the programme.

Why the Current Situation Demands Attention

The ongoing conflict and instability across the Middle East presents a different but equally serious set of risks. The region is a significant source of natural stone, specialist finishes, high-specification sanitaryware, decorative metalwork and other luxury or bespoke materials that regularly feature in refurbishment and mixed-use development projects across the North West and beyond.

It is also a critical corridor for global shipping routes, and any sustained disruption to those routes has the potential to affect lead times and costs on a far broader range of materials than those sourced directly from the region itself.

The particular vulnerability here lies with turnkey developments, projects where an eventual operator or occupier has specified materials as part of their brand or fit-out standards. When an operator specifies stone that can only be quarried from one location, or a finish that relies on a single-source supplier, the entire procurement strategy rests on a supply chain that geopolitical events can sever almost instantly.

The first port of call in these situations is negotiation, working with the operator to identify a suitable alternative that meets their quality and aesthetic standards. In many cases a workable solution can be found. But where the material in question is integral to the brand identity, that conversation can be extremely difficult, and alternatives are not always acceptable. There is no Plan B built in, because the specification doesn't allow for one.

Why Refurbishment Is More Exposed Than New Build

New build projects offer design flexibility. When a material or component becomes difficult to source, the design team can adapt. Specifications can be revised, alternatives can be approved, and the project can keep moving. The constraints are commercial, not physical.

Refurbishment projects are different. The existing building defines the parameters. Existing infrastructure, existing dimensions, existing systems, all of these create hard constraints that limit the ability to substitute or redesign. When a critical component is unavailable, the options are genuinely limited.

Add to this the increasing prevalence of operator-driven specifications on mixed-use and hospitality refurbishment schemes and you have a procurement environment that is more vulnerable to external disruption.

What Clients Should Be Doing Now

The good news is that these risks are manageable with the right approach. Here is what we would recommend to any client with a refurbishment project in the pipeline:

Audit your critical path components early. Don't wait until the detailed design stage to identify long-lead or specialist items. Get your development manager to map the supply chain for critical components as early as possible particularly anything electrical, mechanical or operator-specified.

Challenge single-source specifications. If an operator or designer is specifying materials from a single supplier or region, push back early. Ask whether an approved alternative can be agreed in advance. This doesn't mean compromising on quality or brand standards it means building resilience into the procurement strategy before it becomes a crisis.

Fix prices where you can. In a volatile market, early contractor engagement and pre-ordering of long-lead items can significantly reduce exposure. Work with your cost consultant to identify where fixing prices early makes commercial sense.

Build programme contingency around procurement risk. Many programmes still treat procurement as a linear process with standard lead times. In the current environment, that assumption is dangerous. Factor realistic contingency into your programme for any items with complex or geographically concentrated supply chains.

Keep watching the market. Geopolitical situations can shift quickly. What is available today may not be available in six months. Regular procurement reviews, not just at key design stages but throughout the project lifecycle are increasingly essential.

Refurbishment projects are a smart, sustainable and often commercially superior alternative to new build. But they carry procurement risks that are distinct from, and in some cases greater than, those associated with ground-up development.

In the current geopolitical climate, understanding and managing those risks isn't optional it's a fundamental part of delivering a successful project.

If you are planning a refurbishment project in Manchester or across the North West and want to discuss how to structure your procurement strategy, we would be happy to talk.