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LONDON-The third quarter 2002 has seen further falls in business demand for commercial property, according to a new RICS survey out today (24 October). Overall 14% more chartered surveyors reported a fall in activity than reported a rise, on top of a 12% defecit during the previous quarter.

Available space rose for the sixth consecutive quarter across all sectors. As a result the third quarter saw a decline in lease lengths and a rise in incentives on offer to tenants. Rental expectations have also been adjusted downwards, although this is mainly due to the poor performance of the London office market which has dragged down by failures of dot com companies and the contraction of the financial services sector. Many areas outside London and the south east have been largely unaffected.

However, the gloomy firgures have been accompanied by an upturn in confidence, reflecting buoyant consumer spending. This has benefited the retail sector, which has performed well during the third quarter and partially offset falls in other areas.

RICS chief executive, Louis Armstrong, said: “The commercial property sector is certainly a mixed-bag at the moment. Firms are obviously unlikely to expand during periods of economic and political uncertainty and yet, outside London and the South East, it is very much a case of business as usual.

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