The twice-yearly survey, conducted between 19 February and 11 March 2009, reveals that while 9% of firms increased the amount of space they occupied in the last six months, 26% reduced it, giving a balance of -17%. This was slightly less than the expected balance of -24%.
The survey also shows a sharper fall expected in property held over the next six months (a balance of -25%), reflecting widespread cuts planned to both output and headcount.
Extraction, chemicals & utilities, construction and transport firms saw the steepest falls in the past six months. The sharpest declines in the next six months will be in finance, business services and manufacturing, reflecting trends in the broader economy. Retail is the only sector to report an increase in property holdings in the last six months, and the only one to expect an increase in space occupied over the next six.
Cost reduction and cash flow are the most important issues now affecting property decisions, as business expansion slips down the agenda.
Firms were again asked about the impact of the credit squeeze and the slowing economy on their business. This time, access to credit is having an effect on 88% and the economy on 98%, an increase from 80% last time for both measures.
Howard Cooke, director at property consultants GVA Grimley, said: “Firms reduced their property holdings over the past six months, and this looks set to continue as they cut costs to stay afloat.
“The recession has been felt by almost every business, and most are seeing at least some impact from tighter lending conditions. Surplus property is on the increase, as is vacant space, and this can only exacerbate firms’ costs now empty property rate relief has reduced.”
Karen Dee, the CBI’s head of infrastructure said: "The only businesses likely to benefit from the government's changes to empty property rate relief are the demolition firms.
“This £1 billion cost on businesses has done nothing to help firms reduce costs or survive the recession. Empty rate relief should be restored without delay."
