A new survey finds that government budget cuts have contributed to a falling demand from commercial property tenants.
Tenant demand in the commercial development sector has fallen in the second quarter of 2010, according to new research.
A survey conducted by the Royal Institution of Chartered Surveyors (Rics) has found that seven per cent more of its members reported falling rather than rising demand.
This is the first negative result in the quarterly poll since the first three months of 2009, Rics claims.
Notably, demand in London has fallen dramatically, with 38 per cent more chartered surveyors reporting a fall.
Rics senior economist Oliver Gilmartin says that the uncertainty around government budget cuts is weighing heavily on property investment decisions, resulting in waning demand.
"Investment demand has also fallen back for the first time in a year with some indication that prices are declining again outside the Central London office and retail sectors," he added.
BNP Paribas claimed last week that it will take around 15 years for commercial property values to reach pre-recession levels again.
Posted by Allan Flowers
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