The level of activity across many of the UK's commercial development sectors fell during September, Savills has revealed, making it the third consecutive month of declines. According to the organisation, the industry has a broadly negative outlook for the coming three months, with 23 per cent of respondents predicting further drops in activity, compared to just 18 per cent who believe it will improve. A lack of new commercial developments in the pipeline is likely to have a knock-on effect for investors in this area, who may see a shortage of supply of such assets in the coming years.
Although overall development activity has fallen, this decline is much more pronounced in the public than in the private sector, Savills noted. The office, retail and leisure industries experienced particularly sharp drops in public sector work, the firm noted, while activity among private companies also slowed, but at a much weaker rate. The only categories to post growth during September were refurbishment and office fit-out, with the former seeing robust expansion.
In an interview with Property Week at the 2011 Expo Real conference, European president of Prologis Philip Dunne pointed out that restricted supply of commercial real estate is helping to boost occupancy rates in existing properties, a scenario that investors may be able to capitalise on.