A TOP level survey says that business demand for property is flattening nationally due to a more subdued economy.

The August review of the economy and property markets by the Royal Institution of Chartered Surveyors (RICS) says the commercial property sector is entering a period of more stable growth nationally as economic activity slows.

"Retail property is feeling the effect of easing consumer demand while the industrial sector's performance is being pegged back by a high currency.

"Though surveyors are more cautious than in the last quarter, a firm economy should underpin future activity," the review adds.

It says rental growth in the office sector is more moderate outside London than in the capital, according to the RICS Commercial Market Survey.

The review says rental growth in the retail sector declined according to Investment Property Databank figures for the second quarter, up 4.2 per cent on an annualised basis, compared to 5.8 per cent in the previous quarter.

And the review says "investors are discriminating between the high street and out-of-town property", with capital values for the former down four months in succession to June, but retail warehouse capital values rising at a firm pace, though still down from the end of last year.

Although figures vary for industrial rental growth the RICS Commercial Market Survey suggests demand is moderating, as "manufacturing activity conditions remain tough."

"While the overall outlook is still favourable for property, institutional investors seem to expect slower economic activity to lower growth in capital values over the near term," it says.