Commercial property activity 'strongest in 2 years'

Commercial property trade is enjoying a comeback as businesses slowly claw back their losses sustained during the recession.

According to research conducted by Markit on behalf of Savills, March saw a marked monthly expansion in total commercial development activity. In fact, the sector was at its strongest for over two years.

Around a quarter of commercial developers surveyed recorded an increase in overall activity during the month, compared to 12 per cent who indicated a decline.

Furthermore, the trend towards improvement was seen in both the private and public sectors, with public activity rising for the first time since February 2010, while work on private contracts increased for the third consecutive month.

Looking ahead, developers are expecting at least a short-term continuation of the positive results. Approximately 18 per cent of respondents expect activity to continue to increase over the next three months, while ten per cent anticipate a fall. Improvements in general economic conditions were shown to be the main driver of the growth in the commercial property sector.

Michael Pillow, head of building consultancy at Savills, commented on the March data: “With development activity rising at its strongest rate for two years, it is clear that developers are anticipating a demand-side improvement.

“Encouragingly, this recovery appears to be broad-based and not just London-focused.”

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