LONDON, March 21 Reuters Falls in British commercial property values are expected to slow in the coming months as the economy improves but high inflation and interest rates will continue to weigh on the sector, an industry survey showed on Tuesday.

Real estate firm Robert Irving Burns RIB forecast a 1.6 drop in sales prices per square foot in the second quarter of 2023 from the first three months of the year, a less severe decline than the 2.9 fall forecast in the first quarter.

Rental values are expected to decline 0.4 across the commercial sector.

The sharp price correction we saw at the start of the year appears to be tempering … and while both sales and rental values are expected to remain on the downward trajectory, it does feel like we39;re nearing the floor, Antony Antoniou, CEO of RIB, said.

Some measures of Britain39;s economy have improved in recent months and last week the country39;s budget forecasters said they no longer expected a recession this year.

Sales values across all subcategories including retail, industrial and leisure were set to edge down in the second quarter with the office sector seeing the largest fall, down 2.7, RIB said.

Despite more workers returning to the office following the COVID19 lockdowns, nearly a quarter of respondents expected office space values to slip by more than 5 over the period.

Compared with the residential housing market, commercial property is less exposed to the costofliving crisis but it has been hit by a…