Firms optimistic on commercial rents

Small businesses expect to develop their property portfolios during the first half of 2008 despite the economic slowdown, according to a new report.

The six-monthly Corporate Real Estate Survey, published by the Confederation of British Industry (CBI), suggests that both output and employment will grow during the first half of 2008.

It reveals that 43% of firms expect to expand their use of property space over the next six months, while only 22% plan to reduce it. This balance of +21% is down by just 1 percentage point from the previous survey, offering a more optimistic outlook than some analysts had expected.

The survey was conducted between 24 October and 14 November, by property consultants GVA Grimley (GVA).

GVA Director Howard Cooke said: "This survey does not support speculation about a crisis in commercial property. Firms are still expecting to expand their occupation as much as they have in recent months."

The survey also found that 82% of firms opposed government plans to scrap the empty rate relief.

Currently, all non-industrial businesses receive 50% relief on their rates on buildings, once they have been empty for three months. However, this is due to change under new rules planned for April.