LONDON—Total commercial development in the UK climbed from +14.2% to +14.7% February to March, according to a recent report from Savills.
This week, the firm released its April Commercial Development Activity Report which references a Total Commercial Development Activity Index – a net balance monitoring the overall performance of the UK commercial property sector. The analysis is compiled by Markit Economics on behalf of Savills.
The February to March findings “indicated a marked rate of expansion that was the strongest since last December,” the report notes.
Growth of commercial projects has now been recorded for 31 successive months. The acceleration in the rate of expansion reflected a faster increase in public work, as private projects rose at a weaker pace. Nonetheless, the net balance for private activity (+21.0%) remained well above that for public work (+4.2%).
March saw growth of private office work accelerate to the strongest since July 2014, with a net balance of 14.6% of companies reporting rises. Conversely, public office projects increased at a weaker pace, with the net balance dropping from +4.1% in February to +1.5% in March.
Public retail & leisure activity stabilized in March after falling in each of the previous two months.
Private retail & leisure projects rose further in March, marking a 26-month sequence of expansion. The rate of growth was solid and stronger than in February.
New construction in the public sector was up for the second month in succession during March. However, the rate of expansion eased since February. Private new build activity also increased at a weaker rate, with the net balance decreasing from +21.9% to +18.5%.
Savills says UK commercial developers remained optimistic in March that activity will increase over the next three months. A net balance of +22.1% of panelists anticipate growth, compared with +19.1% in the prior month, the study shows.
That positive sentiment was linked to improved client confidence, low interest rates and better economic conditions, Savills says.
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