UK development outlook bright despite slower growth - Savills

The pace of UK commercial development growth slowed in July, but the medium-term prospects remain good, according to the latest monthly survey by Savills Building and Project Consultancy.

Total commercial development activity was measured at +14.3%, the slowest growth rate recorded since April. However, June’s figure of 22.2% was the highest in nine months and confidence in the sector remains strong.

The fall was accounted for by slower growth in private commercial activity, while the public sector remained unchanged. London and the South-East also saw significantly more modest growth in July compared to June.

Despite the more muted activity expectations remained high, with overall confidence increasing to +22.1%, its highest level since March. Conversely the industrial and warehouse sector, which has been the strongest performing tranche for the last two months, recorded a slight fall in confidence from +31.7% to +26.8%, though this is still ahead of the office and retail sectors, both on +19.8%.

Simon Collett, head of building and project consultancy at Savills, said: ‘With optimism continuing to improve, we suspect the slower expansion noted in July will be short-lived.’