Retailers will continue to gain power in property negotiations this year, according to a report published this week by property agency King Sturge.

Increasing numbers of voids, falling property values and a slowing construction pipeline will continue to put a strain on landlords, the report said. This will mean retailers can expect more favourable terms – including incentive payments, more break clauses and rent holidays – as landlords struggle to fill schemes.

Risk of two-tier market

The report also claimed UK commercial property is at risk of becoming a “two-tier” market. Only prime property will grow in value, while the value of vacant secondary and tertiary property will fall by more than a fifth in 2009.

King Sturge partner Charles Miller said: “There’s realism across the market in terms of the need to get space let.” But he added: “Landlords won’t do deals that aren’t commercially viable.”