Overall, new occupier enquiries flattened out and floorspace availability sharply rose at the fastest rate in three and a half years. Weaker demand has led landlords to offer greater inducements to persuade tenants to take space. 16% of surveyors reported a drop in demand for business premises, against 11% three months previously.
The weakest sector is still the office market, where landlords are trying to combat flagging demand by reducing lease lengths and offering larger incentive packages to entice prospective tenants. Central London demand was weakest with 42% of surveyors reporting a drop in sales and lettings. Other areas across the UK saw a visible slowdown but held up better than the London market.
RICS chief executive Louis Armstrong said: 'Weak business demand has meant that bargaining power remains firmly in favour of occupiers and it looks as if companies are digging in for a long haul by postponing business development plans. The announcement by the Chancellor of a change to lease duty will also be unwelcome news to larger tenants and occupiers. This is likely to have a negative impact on demand in coming months.'
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