September 12, 2014
The UK commercial property sector grew for the 24th consecutive month in August, but at its weakest rate since May 2013. According to the latest Total Commercial Development Activity Index from Savills, which monitors the overall performance of the UK commercial property sector, the rate fell from +27.7% to +11.9% in August, the weakest expansion in 15 months. Commercial work continued to rise in the private and public sectors however, and despite growth slowing substantially in both cases, commercial developers in the UK remained optimistic. Anecdotal evidence linked this to positive expectations of increased public sector activity and client interest in new projects. Although solid overall, the growth of refurbishment activity in August was the least pronounced since May 2013 and following 17 successive months of growth, panellists reported stagnation in office fit-out activity as well.
Across the UK, private sector office activity rose for the twenty-fourth consecutive month in August, though the net balance dipped to a 15- month low of +2.2% and public office activity declined for the first time since September 2013, with the respective net balance posted at -3.7%.
When split into regions, The ‘Rest of the UK’ i.e. outside London the and South East, remained the best performing region, although the net balance weakened to the lowest in 15 months (+13.8%). The South East also saw a decelerated pace of growth as the respective net balance dropped sharply to +12.7% (from +32.8%).
The mildest slowdown was registered throughout the Capital, with net balance at +10.6% in August, down from +17.4% in July. This is backed up by Savills latest City Office watch which revealed take up of office space in the City was up 6% compared to this time last year.