The UK’s commercial property market was broadly stagnant in the second quarter, with subdued occupier demand and investment enquiries, according to RICS’ UK Commercial Property Monitor.

Overall occupier demand nudged down in Q2, with office and industrial property reporting net balances of 2% and 4% respectively. While the figures are positive, RICS said a net result below 5% indicates a flat picture.

Investment levels were also subdued at a national level, but London struck a more optimistic tone.

Respondents in the capital’s core reported stronger momentum behind occupier demand compared with national data, which RICS predicts will translate into greater rental price growth over the year ahead.

Across UK sectors, vacant space increased, prompting landlords to increase the value of incentive packages being offered to tenants.

Investment enquiries stood at a perfectly flat 0% figure. RICS added that respondents were unsurprisingly split on where they think the market is heading, with 35% believing the market is in an upturn phase, while the same proportion think it is moving downwards.

Despite the muted national conditions, most respondents believe rental prices will move upwards across the office and industrial sectors over the year ahead. Growth is expected to be concentrated among prime property.

Retail property continues to exhibit weaker conditions than residential and industrial, and the sector returned a -13% result in the quarter, the same as Q1.

Tarrant Parsons, RICS head of market research and analysis, said the results of the monitor were “consistent with a largely stagnant market at the national level”.

He added: “Both occupier demand and investment enquiries are still broadly flat, while landlords continue to offer significant incentives to attract tenants amid rising vacant space.

“That said, prime assets and alternative sectors are poised for modest capital value and rental growth over the year ahead, with a slightly more favourable credit environment lending some support to the outlook.”