Demand for retail property could nosedive to a record low over coming months, the CBI and GVA Grimley have warned in the latest Property Trends Survey.
The lowest levels of retail property demand on record are predicted over the next six months, with only 1 per cent more retailers expecting to open stores than those expecting their property portfolios to remain stable or even shrink.
The problem is growing. Over the past six months, a balance of just 2 per cent of retailers increased their property holdings, compared with 7 per cent in the previous six months and 14 per cent in the CBI/GVA Grimley Property Trends Survey the year before.
'The retail sector is less optimistic than it has been for several years. Demand is expected to remain broadly stable, which is well below trend for this sector,' according to the report.
Since the CBI and GVA Grimley first published the Property Trends Survey in 1994, this measure of retail demand has averaged 20 per cent.
GVA Grimley head of research Stuart Morley described the situation as 'quite pessimistic'.
According to Morley: 'Retail is moving negative.'
Increasing business uncertainty, underpinned by slowing retail sales and concerns over consumer confidence, the housing market and interest rates, has caused a slowdown in demand for retail space as retailers become increasingly unsure about their property requirements.
Large retailers are the least optimistic with the majority expecting their demand for property to decline over the next six months.