One-quarter of firms plan to shed property

One-quarter of businesses expect to reduce their property footprint in the next six months, according to a survey by the CBI.

The survey, carried out for the CBI by agent GVA Grimley, found that a significant fall in property demand is expected in the next six months, despite a balance of respondents having increased their property holdings in the past half-year.

In addition, one-fifth of businesses said they are demolishing buildings because of the government's abolition of the tax rebate on empty property, with half saying that the new tax is affecting their business.

A balance of 3% increased their property holdings in the past six months - less than the 15% that did so in the previous six-month period, and less than was expected.

Howard Cooke, director at GVA Grimley, said that the trend of firms reducing their property holdings is accelerating, with significant falls in demand expected over the coming six months.

He said: “Most firms are now feeling at least some effect from the tighter lending conditions and the economic slowdown. Falling business activity and lower demand is likely to increase the property surpluses, which will only push up the cost of paying empty property rates.”