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Commercial property activity in the UK increased sharply in June

Public and private commercial projects both expanded, with the latter leading the rise and activity increased in all three surveyed UK regions.

The fastest rise was noted on industrial and warehouse activity, with the net balance posting 26.3% in June. The Total Commercial Development Activity Index, a net balance monitoring the overall performance of the UK commercial property sector, rose from 5.8% in May to 18.9% in June.

The net balance for London rose to a three month high of 23.6% and the net balance for the rest of UK was 26.5%, up from 11.5% in May, signalling the strongest expansion in activity since April 2007.

Of the nine monitored sectors, seven posted growth, the only exceptions being publicoffice work and public new build projects.
Private commercial work rose for the tenth successive month, while an increase in public sector projects was the first since February.

Growth of activity was generally linked to new contract wins, improved weather and optimism was signalled by commercial developers for the ninth consecutive month in June.

Evidence suggested that commercial activity is projected to rise in line with forecasts of better economic conditions, strengthening client demand and improved confidence.

Commercial developers across the UK indicated that private office activity increased in June, with the pace of growth accelerating from May. After contracting for over three and a half years, office activity in the public sector
stabilised in June. Also retail and leisure projects expanded in both the public and private sectors in June. Growth of private retail and leisure work accelerated to the quickest since March 2007.

Private new build projects increased sharply in June. At 22.7%, the net balance was at a six year high. Meanwhile, the net balance for public sector new build activity fell from 2.8% in May to -1.4%, signalling a contraction.

Commercial developers across the UK indicated increased refurbishment activity for the tenth successive month in June, up from +9.6% in May, a net balance of +19.2% of panellists signalled higher refurbishment work.

For the fourth month running, office fit out activity in the UK rose during June. The net balance posted +7.5%, up from +1.1% in May, and signalled a solid rise in office fit out work.

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