Commercial property is increasingly in demand as more businesses look to gradually expand their operations, the latest research suggests.

Shops, offices and factories attracted growing interest from potential buyers in the run-up to summer, according to the latest RICS Commercial Market Survey.

A net balance of 15% more surveyors reported increases in demand, the report reveals, with London in particular acting as the driving force.

Nevertheless the data shows there was an upward trend across all parts of the country and, although the headline figures remain historically subdued, the pattern lends weight to a growing feeling that there are signs of recovery in the property market and wider UK economy.

As demand for commercial property increased, the number of available properties simultaneously declined slightly – raising the suggestion that rents will stabilise.
Predictions of the amount of rent that business premises will generate have been low since 2008, but this could be the latest sign that things are changing for the better.

Firms on the lookout for commercial property to buy or to let may also be encouraged by the finding that the amount of newly built commercial premises is starting to stabilise.

Construction levels fell markedly during the downturn but no significant falls have been recorded for a while now, while there was even a rise in the amount of office space built in the last quarter.

Stephanie McMahon, head of research at Strutt & Parker, said: "It is good news to add the RICS survey to the other positive sentiment indicators that have been released of late, we do need to put this in the context of very low levels of demand in some markets and where secondary and tertiary stock is unlikely to fit growing companies needs. Companies are in a number of different situations; some seeking new space at the point of lease expiry, whereas others will remain in situ and expand into their own grey space that has emerged over the past 5 years. As such, we can anticipate a bumpy path back to positive demand territory.”

The encouraging RICS figures come after the latest ICAEW/Grant Thornton UK Business Confidence Monitor suggested business confidence is continuing to improve across the country.

In a cautiously optimistic report that acknowledged "downside risks", the monitor estimated further growth for the economy in quarter two with key financial indicators showing "solid profit and turnover growth".