Higher demand for retail property

Overall demand for retail property is expected to rise over the next six months, according to the Survey of Property. But rising demand masks discouraging forecasts in other key property market sectors and, for the first time in the survey's 11-year history, the retail sector expects to reduce its property holdings over the next six months.

Following an increase in business output over the past six months, the survey suggests that output growth is likely to slow over the next six. A balance of plus seven per cent of respondents reported a rise in the number of people employed over the last six months and this looks set to continue over the coming half year.

Business optimism among respondents remains in the negative, however, reflecting broader uncertainty about prospects for the economy and downward revisions to the Government's economic growth forecasts. A negative balance was recorded for the third successive survey, this time of minus 13 per cent.

Stuart Morley, National Head of Research at GVA Grimley said: "With the UK economy expected to grow at below trend this year and next, it is not surprising that the survey indicates a slowing of output growth. However, employers still appear to be happy to increase employment levels, albeit modestly, which indicates that the current mild slowdown is expected to be short-lived. This is a further indication that there should be a sustained, if unspectacular, occupier demand for commercial property going forward, which is borne out by the survey's results."