Development activity weakens in June
UK commercial development activity in June fell for following two months of growth, says Savills, with public-sector activity plummeting while private-sector development actually increased for the 11th month in a row.
The group notes that just under 22% of the commercial developers it surveyed reported a drop in activity overall during June, compared with 19% that indicated an increase. As a result, Savills’ Total Commercial Development Activity Index was -2.8% for June, compared with +4.1% in May. The net balance of the index during Q2 was +1.8%.
Expectations were also weaker in June, with the future expectations index at +5.3%, down from +8.6% in May. Savills cited anecdotal evidence that constraints on bank lending and worries about future public-sector demand had weighed on confidence.
By sector, developers were most upbeat about industrial / warehouse activity – and least confident about office development. Refurbishment was one of the fastest-growing areas of activity as measured by the survey.
