FEARS over the high street have been fuelled after it emerged that demand for space was falling even before the collapse of three major players.

A survey by the Royal Institution of Chartered Surveyors' (RICS) revealed a 13% fall in the net balance of businesses looking at retail premises to rent in the final three months of the year, against an 18% fall the previous quarter.

London's retail landlords saw the heftiest drop in demand since mid-2009, while Wales and the Midlands were the only regions where demand did not fall, according to the report.

RICS chief economist Simon Rubinsohn said the end of 2012 was "yet another incredibly tough period for the high street" and had been brought to a head by the recent news of HMV, Blockbuster and Jessops, which went into administration this month.

He said: "Sadly, this downbeat picture doesn't look like changing any time soon with demand for retail space continuing to drop and more empty premises set to blight the country's town centres."

The survey also found that a balance of 22% more surveyors expected rent to continue to fall over the coming months.

Craig Powell, surveyor at Holloway Iliffe & Mitchell in Southampton, said that as many retailers expanded their online presence, prime retail tenants were keen to ensure landlords only benefited from the slice of turnover generated by their bricks and mortar stores.

He said: "Christmas 2012 was another record for online sales and landlords have to consider rent payment terms to incentivise larger retailers to retain their existing number and size of stores instead of moving to smaller formats that simply allow customers to collect online purchases."

It was a brighter picture for both offices and industrial unit landlords, where demand increased for the first time in 18 months, although rents will be subdued with the amount of available space also rising, the survey found.

But the report said office rents were expected to rise in Central London, and industrial rents could edge up in both the North and the South.

© Press Association 2013