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Demand for Commercial Property Falls for the First Time in Five Years

LONDON-Demand for commercial property over the past six months fell for the first time in five years, according to a report by the Confederation of British Industry and GVA Grimley. But the report does show an expected pick-up in the market over the second half of this year.

By Graham Parker | Updated on June 20, 2003

LONDON-Business demand for commercial property is declining, according to the latest CBI/GVA Grimley survey. For the first time in five years more companies were shedding space during the past six months than were acquiring. But looking ahead, a balance of four% expect an increase in their floorspace in the next six months.

More than half of the firms–61%–did not increase or decrease their property holdings over the past six months with companies adopting a ‘wait and see’ approach in the face of economic and global uncertainties.

The upturn is likely to be led by the retail sector, with a positive balance of 12% of retailers expecting to increase their property holdings in the next six months, compared with a negative balance of 1% in the last survey. But demand in the office sector is expected to weaken further, with a balance of 4% expecting to decrease their property holdings over the next six months. In the industrial property sector, demand is stronger for distribution property than for manufacturing property.

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