Survey signals hope for troubled UK commercial property sector

By Erikka Askeland
Published on Tuesday 14 February 2012 00:00

SURVEYORS have detected glimmers of confidence in the embattled commercial property market as sentiment for the coming months turned positive for the first time in eight months, research has found.

Although January’s data signalled a further reduction in commercial development activity, the “modest” decline was the slowest in seven months, according to property firm Savills.

According to the research, about 19 per cent of respondents expect activity to rise over the next three months, compared to 17 per cent forecasting a fall.

The contraction in commercial development activity in January was driven by a sharp fall in public sector work, particularly building projects.

The overall decline contrasted with a return to private sector growth, Savills said, although only one of the nine sectors monitored – refurbishment – posted a rise in activity.

All other categories – particularly retail and leisure but also office development, warehouses and fit out – continued to record a decline albeit at a weaker rate of decrease.

Michael Pillow, head of building consultancy at Savills, predicted that the upturn in sentiment would see some long-awaited investment return to the market this year.

Pillow said: “The new year has seen a return to optimism amongst developers.

“We expect 2012 to be the year that rents start to rise outside London and this should stimulate some renewed interest in starting stalled schemes.”

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