Commercial development falls in June

UK commercial development fell in June for the first time in three months after a sharp drop in public sector activity, new data from Savills has shown.

Responding to a Savills questionnaire, around 22% of commercial developers reported a drop in overall activity last month, with only 19% reporting a rise.

The resultant net balance – the Savills Total Commercial Development Activity Index – posted -2.8% for June, its worst score in 11 months.

Public commercial development activity showed a net balance of -28.6%, the sector’s fourth consecutive monthly fall.

The lowest levels of June public sector activity were in office developments, showing results of -30% on the Index.

Public new builds posted -19.6%, whilst retail and leisure developments were down -18.2%.

The Index was boosted by strong results from the private sector, which enjoyed its eleventh consecutive month of growth with a June net balance of +10.6%.

Michael Pillow, head of building consultancy at Savills, said: “Public sector austerity measures are now firmly impacting on the development market, with development activity for public sector clients now in double-dip territory. Thankfully the slack is being taken up by continuing growth in the private sector.”