There has been a decline in the demand for commercial property in the UK, new figures have shown. In particular, the office sector has seen the largest falls during the third quarter of 2010, the latest Commercial Market Survey from the Royal Institution of Chartered Surveyors (RICS) shows.
However, in contrast development starts for office property in London increased for the first time since the global economic crisis during the period. Expectations for central London office rents stabilised after increasing in the second quarter, RICS said, while industrial rents in the capital also stabilised.
But surveyors' expectations for increased supply and weaker demand impacted on their outlook for rental growth, with 16 per cent more anticipating rents falling rather than rising over the next three months.
"We are seeing a mixed picture for the commercial property sector across England and Wales. The year started positively but worries over the impact of spending cuts and the sustainability of the economic recovery appear to be creating an air of caution, which is impacting on the commercial property sector," said Simon Rubinsohn, RICS chief economist.