THE balance of advantage is moving out of the hands of landlords and back towards the tenant.

This is the verdict of a new report as the commercial property market recorded its third successive downturn during the last quarter of 2001.

The latest survey from the Royal Institution of Chartered Surveyors (RICS) found that, after nine months of falling business occupation, there has been a shift in emphasis. Landlords have dramatically increased incentives to clients to take on new leases while at the same time, lease lengths have been falling.

David Tuffin, chairman of RICS South East which includes Buckinghamshire, said: "The commercial property market is a great barometer for the economy as a whole and chartered surveyors are often the first to detect trends in the market.

"This survey shows lower levels of business expansion have markedly affected activity and confidence."

Only five per cent of surveyors interviewed in England and Wales reported a rise in occupation of property through new lettings or sales, while 43 per cent reported a fall.

The negative balance of 38 per cent, the survey concluded, is indicative of increased business uncertainty and a clampdown on corporate investment.

One sector where property demand has stabilised is out-of-town warehouses, benefiting from a boom in spending on durable goods such as DVDs.

But, said Mr Tuffin, the fundamental nature of the market is different from that experienced in the early 1990s.

"There has not been an explosion of new development space, so oversupply will not be such a feature and consumer expenditure remains buoyant," he said.

"Furthermore low levels of interest rates have helped to maintain property values.

"Nevertheless the health and strength of the occupier is ultimately the most important element affecting demand for space, and in this respect the commercial market has a challenging time ahead in certain sectors."

Lance Slater of Marlow commercial agents Deriaz Slater said: "The level of ongoing demand is reasonable and the market is more active than we thought it might have been."

Mr Slater added: "People like us are extremely busy at the moment."

Deriaz Slater is currently marketing Thames House in Mere Park, Marlow, a new office building of 12,950 sq ft on two floors which can be split or let as a whole.

Quoted rental is £27.50 per sq ft.