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Commercial activity drops for 1st time in 4 years
A survey by Savills found 22 per cent of developers reported a drop in activity in November, compared to just 12 per cent reporting a rise.
It is the first time the firm has seen a fall in its Total Commercial Development Activity Index since May 2003.
The slump was blamed on increased borrowing rates, a slowdown in new projects coming to market and uncertainty in the overall economic outlook.
Developers remain pessimistic about activity into 2008, a third anticipating a further decline in commercial activity.
Savills' head of commercial research Mat Oakley said a fall in interest rates may raise prospects into the new year:
"It's evident that the credit squeeze in particular is now impacting heavily on developers' activity and expectations.
"The one possible ray of sunlight in an otherwise drab set of data is the December cut in the UK base rate. While this signals concern about the strength of the UK economy, the implied reduction in the cost of money should prove a spur to developers' confidence in early 2008.
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