With output values and demand for new commercial property in the
UK faltering as a result of the recession, the RSA predicts that
positive growth is not likely in the sector until 2014 with no
return to pre-credit crunch highs until 2023.

The UK's largest commercial insurer discussed the issue of
overall output values dropping by almost a third (32 per cent)
between 2007 and 2011 to £28 billion - their lowest level in a
decade.

Although the latest GDP figures have confirmed the UK has
swiftly evaded a double-dip recession, the nation's construction
industry still faces an unsteady trading climate in the coming
months and years.

A peak to trough decline of 42 per cent in commercial real
estate (CRE) construction output closely follows the path of GDP.
Between 2007 and 2011 the value of CRE construction activity fell
by as much as 32 per cent from £41 billion to £28 billion. The
figure is expected to fall by a further £1 billion this year, with
a return to positive growth in 2014 with only a modest 0.3 per cent
rise anticipated.

Paul Greensmith, director of risk managed business, global
speciality lines at RSA, said: "The commercial real estate sector
has been hit hard by the recession, and with CRE construction
growth so closely tied to GDP, it is not surprising that we've seen
such a sharp decline in output values since 2007.

"While a return to the pre-recession highs of 2007 may not be
wholly realistic, what's important now is that developers approach
new investment opportunities sensibly and with sustainable growth
in mind."

There has so far been reduced demand for new commercial property
development across all UK regions except in central London, with the capital showing an
appetite for the right kind of development.

"The City skyline is a prime example of that, with builds such
as The Shard in London demonstrating that certain projects,
particularly mixed use developments, are still going ahead," added
Greensmith.

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