Property News - Retailers cut back on taking leases

Retail occupier activity took an abrupt downturn in the first part of this year, according to the latest commercial market survey from the RICS.

The downturn reflects dis-appointing consumer spending, which had held up well last year and helped the retail sector outperform other property sectors.

Only 8 per cent of surveyors expect retail leasing activity to increase over the next quarter, while 28 per cent expect it to fall further. This is because of a slump in new occupier enquiries - 23 per cent of surveyors said retail requirements were down over the quarter, against only 10 per cent who said they were up.

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.'