Growth in the region’s commercial property market in first half of the year faltered during quarter three as occupier demand fell back for the first time in nine months, according to a new report.

The latest commercial market survey by the Royal Institution of Chartered Surveyors shows that tenant demand in the north west declined between July and September, moving into negative territory for the first time this year.

As demand fell, available space in the region north west continued to rise, with 32 per cent more surveyors reporting available space rose rather than fell over the last three months.

It picked up fastest in the retail sector, with a net balance of 37 per cent.

Landlords have responded with a spate of special offers, which are now increasing at their fastest pace since quarter one, 2010 and surveyors note that some landlords are incorporating more flexibility into their leases.

Falling demand and rising availability impacted on rental expectations in the region, which weakened over the quarter, moving deeper into negative territory.

Those surveyed were least optimistic for office rents, with -30 per cent of surveyors reporting declining rents.

RICS chief economist Simon Rubinsohn said: “The downbeat picture for the north west commercial property market reflects the wave of negative news flow surrounding both the prospects for the UK economy and the sovereign debt crisis in Europe.

“Confidence is clearly critical for the whole of the real estate sector and in the near term there is little reason to believe that it is likely to improve.

“Against this background, any recovery in rents is likely to prove elusive.”

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