Savills' index falls to lowest level since data was first collected in March 2003

Commercial development activity has fallen to a five-year low, according to a new survey by Savills.

The survey’s index of commercial development activity fell to its lowest level since Savills started collecting data in March 2003.

Almost a third of commercial developers reported a fall in overall activity in April, compared with just 12% who registered a rise.

The survey found that respondents were “highly pessimistic” about the three-month outlook for the office development, industrial/warehouse and retail and re sectors. Many said the completion of existing projects would lead to a further fall in activity over the summer.

Mat Oakley, head of commercial research at Savills, said: “The steady stream of bad news relating to the effects of the credit squeeze on the wider economy is clearly impacting on developers’ confidence. Until the debt market eases, and uncertainty about tenant demand relaxes, we expect developers to remain cautious.”