Development activity jumps in February
The rate of expansion by commercial developers in February was the fastest seen since May 2007, according to a survey by Savills. The report says that commercial developers signalled an overall increase in development activity during February, partly due to a rebound from weather-related weakness in January, but also as a result of better economic conditions. Most of the growth in activity related to development taking place in the private sector rather than the public sector, Savills says.
Savills says that about 28% of the respondents to its survey indicated a rise in total commercial activity in February, compared with 11% reporting a decline. As a result, the group’s Total Commercial Development Activity Index was a positive 16.9% for February, following a reading of minus 2.4% for January.
Respondents were positive about the outlook for commercial development activity in the next quarter, although business sentiment was slightly weaker than the long-run series average, and the lowest since July 2009. Developers were most confident about the outlook for industrial and warehouse projects, and the least positive about prospects for office developments. Growth expectations were linked to improving client demand for commercial property for sale and to let, although some firms noted that the upcoming general election had created some uncertainty about public-sector projects, Savills noted.
