The Royal Institution of Chartered Surveyors Commercial Property Survey shows 71% more chartered surveyors reported a fall than a rise in occupier demand compared to 53% in the third quarter of 2008.
All sectors remain firmly in negative territory for the fifth consecutive quarter and have reached their lowest respective balances in the survey's history, the report also shows.
The worst hit area continues to be the retail sector with 78% more chartered surveyors reporting a fall than a rise in retail demand, compared to 59% in Q3.
Rising unemployment has further dampened the outlook for consumer spending through 2009 which has added to the sense of pessimism in the retail sector, where several high profile bankruptcies hit the headlines in the run up to Christmas.
Declines in the rate of new development completions have failed to halt a further loosening in supply with 67% more chartered surveyors reporting a rise in available floor space compared to 47% in Q3.
Bargaining power is increasingly shifting towards tenants who are looking to exercise shorter leases and earlier break clauses given the wider economic uncertainty, the report indicates.
The value of inducements rose at the fastest pace in the survey's history as landlords tried to counter falling demand with incentives. In fact, confidence towards the rental outlook fell to the lowest level since the survey began with pessimism bleakest in central London.
The report predicts that the immediate outlook for lettings activity remains poor as the net balance of surveyors reporting new occupier enquiries declined to yet another record low.
In the investment market, capital values fell at the fastest pace to date. However, there are some tentative signs that transaction activity may be due to bottom, albeit at very subdued levels, with less surveyors reporting declines in purchasing activity, particularly in the office sector.