Demand for office space has risen, despite a downturn in the overall commercial property sector, an RICS report has revealed.

The office market has suffered over recent quarters, but received a boost in the second quarter of this year. The RICS says this is because of strong demand in central London and continued expansion in the business services and financial sectors.

Catherine Penman, property consultant Knight Frank’s head of commercial research, said the market was bouncing back after an uncertain year in 2004.

She said: “There is currently active demand inside the M25, particularly from the public sector, pharmaceuticals, banking and finance. This is because of a more confident market comeback. Last year, office requirements were put on hold because of the uncertain nature of the economy but now companies have pressed the green light and are actively looking.”

Penman said claims that the demand was because of Olympic bid operators looking for a base for the next six years were wrong. “The Olympics will not have had an impact to date,” she said, “But once developments such as Crossrail get going, they will boost demand.”

The results for office space are in contrast to falling demand in the retail and industrial sectors. This is because of higher interest rates and a slowdown in consumer spending in the past 18 months.