According to research published this month, UK commercial developers indicated a further expansion of activity in June. The report by Savills & Markit shows activity up to +22.2% from +18.1% in May, the headline total Commercial Development Activity Index – a net balance monitoring the overall performance of the UK commercial property sector – was at a nine-month high.
Growth of public commercial projects eased, while that for private accelerated. The net balances posted +5.6% and +32.0% respectively.
Activity increased in eight of the nine broad areas of the commercial property sector, the exception being public new build. The fastest rise was recorded for industrial/warehouse work.
In addition, the growth of total UK commercial property activity accelerated in June, with the respective net balance rising to a nine-month high of +22.2%. Public projects increased at a modest and slower pace, while private work expanded at the sharpest rate since July 2014.
In our view this research underpins increased confidence and demand in occupier markets and the emerging & well-publicised supply squeeze which is becoming a feature particularly in the south east of the UK.
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