'Marked easing' in tenant demand declines - commercial mortgages

23 July 2009

The pace of tenant demand declines has slowed, according to new figures which hint at a turnaround in commercial property occupancy.

Figures from the RICS Commercial Property survey show that the pace of decline has slowed down and there are signs that there could be a limited recovery in the sector over the coming months, which could lead more people to seek commercial mortgages to purchase new premises.

A total of 13 per cent more surveyors revealed a fall in tenant demand than witnessed a rise, compared with 40 per cent during the first three months of the year.

Oliver Gilmartin, RICS senior economist, said: "Whilst tenant demand in some areas improved modestly compared to quarter one, the positive move was from extremely low levels."

He added that the future of the market would depend on the labour market and the possible start of the economic recovery.

The survey also supported the view that business demand for commercial office property is stabilising although availability, especially in central London, remains strong.

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