The RICS says demand for commercial property fell for the second successive quarter in the three months to 30 September.
The RICS鈥� latest survey also found that available space during the period rose for the sixth successive quarter. This has resulted in lease lengths shortening and a rise in incentives offered to tenants.

The RICS said the worst performing region was London, and warned it could be further hit by the stock market falls in August and September.

Demand for office space has been falling steadily since the beginning of 2000 and these latest figures will reinforce the gloomy outlook for the commercial sector.

Several projects have stalled this year and the number of projects coming through has dried up as developers wait for schemes to be fully let before going ahead. The London market is also suffering from over supply.

鈥淭he commercial market has gone sour, that鈥檚 for sure. It is tough out there and what is available isn鈥檛 that great,鈥� said one contractor this week.

But the RICS also reported an upsurge of confidence brought on by positive economic indicators such as increased consumer spending. The retail sector has performed better than any other, and offset some of the falls in other areas.

RICS chief executive Louis Armstrong said: 鈥淭he commercial property sector is certainly a mixed bag at the moment.鈥�