The commercial property market in London continues to show a more positive picture than the rest of the UK according to RICS.

Meanwhile, the office sector is outperforming the industrial and retail sectors in both occupier and investment markets.

However, the outlook for capital values and rents is still negative in both the industrial and retail sectors and in all regions outside of the capital.

New development starts of offices have begun to rise but continue to fall for retail and industrial space while investment demand is rising at a faster pace nationally, especially for offices.

RICS surveyors see the greatest volume of available investment funds for London offices while yields decline further.

At a national level, tenant demand rose for the third consecutive quarter in Q2 2011, but the improvement remains modest.

Commenting on the report Simon Rubinsohn, RICS chief economist said: “Once again, the results of the UK Commercial Survey show a stark regional divide with sentiment in London generally more upbeat than elsewhere around the country.

“Moreover, within the capital it is the office sector which has enjoyed the most pronounced recovery. Significantly, the results of the Q2 report provide little reason to believe that this improvement in London will fan out to other parts of the UK in the near term’’ The full RICS UK Commercial Market Survey will be issued at the end of July.