DTZ has warned that office rents may tumble next year, dealing a second devastating blow to landlords who have already seen the value of their portfolios plummet in recent months.

According to today's Daily Telegraph, DTZ is predicting a 15-20% fall in office demand in 2008 as banks and other financial institutions reduce their overheads, which will almost inevitably lead to a softening of rents and the increase in incentives such as rent-free periods.

A collapse in rental demand would dash hopes of a swift revival in sentiment towards the property sector where shares have lost more than a third of their value.