With demand for commercial property down heavily, tenants have become choosier and owners more desperate to hold on to current leases, according to a recent report.

In its Autumn 2009 Investor Report, commercial property agent Hartigan Bolt said refurbishment of office space might be necessary to pull in new tenants and an active management could be a key to ensure existing tenants are retained.

"There is no question that fewer companies are looking to move, and those that do aren't necessarily taking more space, but taking advantage of the market to get better quality and value ... " said the report, written by David Bolt and Chris Hartigan. "This makes it ever more important to look at the quality of space that's vacant and, in many cases, accept that some form of refurbishment will be necessary to have a realistic chance of securing a tenant."

The report also pointed to the varied dynamics of the upper-priced sectors of the market and the lower-priced ones.

There are plenty of sellers at the top end, but few buyers with the capacity to make such a purchase at the moment.

"At the lower end, the market is far more active, with buyers looking at both investments and buildings for owner-occupation," said the report.

That's been the sole bright spot, and the lower interest rate has boosted some recent sales - including one in North Sydney with a return of just over 8%.

However, Hartigan Bolt suggested owners seeking tenants should be willing to consider concessions and look seriously at all offers, as there might not be others coming.

"The cost of losing a potential deal and waiting for another tenant could be very significant," said the report.