Commercial property building and confidence grows

Commercial property development activity across the UK grew sharply in July and at the fastest rate since before the economic collapse, according to a report from agency Savills.

Savills John Gallagher  a steady but slow recovery. Picture: Jon Savage

Growth of commercial development was the strongest in London, but an increase in Scotland means a “steady but slow recovery” is expected.

John Gallagher, head of Savills building consultancy in Scotland, said: “With increase of confidence and construction activity over the summer in Scotland, it is looking very much like we are on the road to a steady but slow recovery in the industry.”

The firm’s total commercial development activity index for July showed a net balance of +20.1 per cent, up from, +18.9 per cent in June. The July figure, which monitors the overall performance of the UK commercial property sector, represents the fastest growth since May 2007.

Growth was largely driven by private commercial work which “rose markedly”, the agency said, while a rise in public sector projects was “marginal”.

As a result of the better figures, Savills said commercial developers in the UK remained upbeat about the prospects for commercial development growth over the next three months. The survey found the strongest degree of positive sentiment in almost seven-and-a-half years.

Michael Pillow, director of building consultancy at Savills ,said: “The sharp rise in confidence bodes well for development activity in the second half of the year. Developers will continue to be restrained by lack of debt but this should ensure a stable recovery.”