London's stalled commercial construction market, is likely to get back into gear this year, according to the RICS.
The prediction was made after the institution released its commercial market survey for the first quarter of 2004. This found that enquiries by businesses to take up office space rose at the fastest rate for four years.

Milan Khatri, chief economist at the RICS, said: "The surprising thing is the rebound in the London office market, so we can be optimistic that there could be an upturn in construction of offices in the next six to 12 months."

Khatri said this would maintain construction growth, should the government fail to deliver on its spending plans. Public spending has kept the construction sector afloat for the past few years.

Bill Peach, an agent specialising in office space in the London City market at property agent Healey & Baker, warned that, although enquiries for space were up 30%, this had not fed through to deals signed.

The RICS research showed that available commercial property on the market did show a slight decline on that recorded at the end of last year.

In the first three months of 2004, 6% more surveyors reported a fall in floorspace to let or sell compared with those experiencing a rise. In the final quarter of 2002, the difference was only 3%.

Retail space fared less well in the RICS research. Although retail sales are holding up, occupier activity remains modest, suggesting that contractors will win little work in the sector in coming months.