INVESTMENT in commercial property continues to increase across the South - despite a "hiccup" in demand from tenants.

International investors are taking shelter in the property market, regardless of the fact that tenant demand faltered briefly, report chartered surveyors Cardales.

"In my 30 years' experience, I haven't seen the market behave quite this way before," said Cardales chief executive Robert Court.

"Money is coming in from all over the world - from South Africa, Australia, the Far East.

"This market is seen as a very safe haven for value, despite a hiccup in tenant demand,"

London-based Cardales is the adviser to the £260 million Glanmore Property fund, which is in turn managed by Thesis Asset Management International.

Glanmore has seen a return of 7.36 per cent over the last 12 months; 30.73 per cent over the last three years and 63.36 per cent over five years.

"UK commercial property has outperformed UK equities over the last three, five and 10-year periods," said Lymington-based Thesis associate director Giles Marriage.

"This consistently strong performance has created a substantial increase in the demand for income-producing commercial property across all sectors and in most regions of the UK," he added.

"This is now causing more and more private investors to take a closer look at an area that has generally been reserved for institutions and the wealthier investor.

"Despite a slowing economy the market is currently still seeing solid demand for commercial property in every region apart from London and the South East, which has slowed over the last two years.

"However there have been some recent and early indications of a recovery in tenant demand in the City, West End and even along the M4 corridor," he added.