More clarity is needed over how Brexit will work in order to reassure the commercial market, RICS claimed in its report on the sector.

It said the commercial property market may be in the early stages of a downturn.

The RICS UK Commercial Market Survey for the second quarter of 2016 found 36% believed the market was on a downward trend, with 54% of respondents in London taking this view.

Jeremy Blackburn, RICS UK head of policy, said those buying or investing in commercial property need reassurance about access to the single market and any tariffs before making any decisions.

Blackburn said: “Osborne, Hammond and Carney have moved to reassure markets post Brexit. Our commercial market survey shows clearly the impact that uncertainty is having on investment and occupier decisions.

“In laying out what we will negotiate for, there is a need for clarity for the ability of financial services to do business in the UK which will affect demand for office space, especially in the City of London.

“Similarly, access to the single market or potential tariff barriers will be key in the longer term for some industrial occupiers and exporters. And immigration plans could well affect the future supply of new commercial space onto the market through construction starts.

“Ministers need to lay out a clear timeline and set of ambitions for negotiating Brexit and our future trade relationships. First Ministers in the devolved nations must play their part in providing reassurance for property markets.”

During the second quarter of 2016, 16% of surveyors saw a drop in demand, after 25% more saw a spike in the first quarter.

This is the largest quarter on quarter deterioration in the reading for investment demand on record, said the RICS.

A cautious demand backdrop is producing significantly weaker rental projections across the board, with 7% more respondents now expecting rents to decline over the coming quarter. This stands in stark contrast to the first quarter, when 26% more respondents anticipated rents would increase in the near term.

Jeff Matsu, senior economist for RICS, said: “Political and economic uncertainty in the aftermath of the referendum result has clearly dampened sentiment in the commercial property market, with the tone becoming visibly more cautious right across the UK. Although the impact is widespread, the drop in confidence has been most pronounced in London.

“Nevertheless, following several years of strong capital value and rental gains, momentum had already appeared to be slowing. Whether or not the sharp deterioration in the RICS survey data is a kneejerk reaction that will unwind as the result is digested, or the start of a more prolonged downturn, remains to be seen.”