Private activity seems to be majorly contributing towards the recent rise in the commercial property market, according to a new report by estate agent Savills.
In the company’s recent commercial development activity index, the figures highlighted that the private sector measure had increased from 10.9 to 17.8 in the last month (March 2013).
This increased activity within the private sector has naturally caused a drop in public projects that are being funded by the government. This public sector measure had fallen to minus 1.3 in March, compared to 1.4 the month earlier. Fewer projects are being funded by the coalition as private investors seem to be making the most from such upward trends.
The report generally suggested that more surveyors had seen an increase in sector activity: “Almost 29 per cent of monitored commercial developers indicated higher activity in the private sector, while 11 per cent noted a fall.”
Looking geographically, activity in London was still increasing at a faster rate than outside of the capital city. Commercial activity had risen from 14 in January to a mammoth 30.5 by March. In comparison, the rest of the UK was only 19.6, which even though is lower than London, is still much higher than the 5.4 measure recorded in December 2012.
The findings by Savills went on to suggest that refurbishment activity has grown the fastest in the first quarter of the year since May 2007, around the time when the financial global crisis hit.
Analysts will be keeping a close eye on these figures to see how the rest of the year will fare within the sector. A clearer picture will be painted once the official figures for the second quarter of the year are announced.