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.'