Rics: Fall in commercial property demand

04 November 2011

Written by Jenny Barrett

The UK's corporate real estate market is becoming weaker.

This is according to the Global Commercial Property Survey from the Royal Institution of Chartered Surveyors (Rics), which found tenant demand fell into negative territory during the third quarter of 2011, indicating fewer people are taking out commercial mortgages than in the past.

Agents based in London are also noticing a drop in requests in response to wider economic trends, which has resulted in the city's market losing its momentum.

Firms in the sector are generally pessimistic about the next three months, with many predicting further falls in capital value and rental expectations alongside a cut in tenant demand.

Rics chief economist Simon Rubinsohn said: "The global real estate market flourishes when economic conditions are stable and strong."

This contrasts with the recent research report UK Investment Transactions from Lambert Smith Hampton, which found sales in this sector grew 22 per cent when compared with the preceding quarter.