Telerik Reporting sections/panels behavior is to keep the space they occupy no matter their child items. As a workaround our suggestion is to set the section (detail) height to a very small value in code behind just after the InitializeComponent() is called in the report's constructor. As shown in the following code snippet. This will keep your design time intact and in the same time initially will shrink the report's detail section.
Report1 : Telerik.Reporting.Report
// Required for telerik Reporting designer support
.detail.Height = Unit.Pixel(1);
the Telerik team
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