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Empty commercial property plaguing UK companies

Some 52% of the companies that took part in the survey reported having surplus property and nearly half are offering incentives to attract new occupants. A third are speeding up the surrender of leases through break clauses and 12% plan to demolish the extra space.

The report by the Confederation of British Industry and property services firm GVA Grimley said a net of 25% of respondents expect to cut business space by this September, after 17% did so in the six months since September 2008.

'Firms reduced their property holdings over the past six months, and this looks set to continue as they cut costs to stay afloat,' said GVA director Howard Cooke.

Companies in finance, business services and manufacturing will be making the sharpest cuts to properties held, reflecting trends in the broader economy, the report said, while only the retail sector is expected to show an increase.

The CBI is lobbying for tax relief for landlords sitting on unused offices and shops, after the government limited business rates tax relief to smaller properties in its Budget announced last week.

The report also shows that access to credit is having an effect on 88% of firms and the weakening economy on 98%, an increase from 80% from the last six monthly survey.

'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,' added Cooke.