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Firms begin to build on recovery

Tom Stevenson
Sunday 05 January 1997 19:02 EST
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The upturn in the commercial property market continues in full swing, with a third of British companies expecting to increase their property holdings over the next six months. The findings of a survey conducted by the Confederation of British Industry and Grimley, the property adviser, are the strongest evidence yet that the recovery in consumer sentiment is spreading to all parts of the economy.

Retailers are leading the upsurge in property investment, with medium and larger companies setting the pace. For the first time demand for town centre space matched out-of- town and suburban requirements, suggesting the Government is succeeding in its stated aim of stemming the flow to environmentally unfriendly greenfield shopping centres.

Sudhir Janankar, CBI associate director, said: "Business confidence has strengthened markedly compared with six months ago and companies expect a further pick-up ... led by domestic demand. With profitability set to grow faster over the next six months, the upturn in the commercial property market is becoming more firmly based."

The CBI/Grimley survey shows the highest expectations since the poll began in November 1994. Thirty-two per cent of companies expect to increase their property holdings, while 26 per cent expect a reduction.

The biggest increases are expected to come from the distribution, metal manufacturing and chemical processing, transport and communications sectors.

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