The agent says weakening demand and increasing levels of supply caused the dip. Total available office space in Mayfair increased to 260,503 sf and St James's availability increased to 186,659 sf. Cluttons believes that this trend will escalate over the coming months.

At the same time, take-up slowed in Mayfair with just 150,588 sf let. However, take-up increased significantly in St James's from just 80,752 sf in the last four months of 2000 to 152,806 sf during the first four months of 2001. Looking ahead, the development pipeline remains limited. In Mayfair, just over 484,380 sf has planning consent, which equates to just one year's take-up. And St James's has little stock in the development pipeline and only 78,631 sf under construction, the lowest level since January 1995.

Melanie Bayliff, Research Analyst in Cluttons' Central London Business Team said: 'We believe that the scarcity of grade A space in St James, both now and in the future, will help to sustain prime rental values in the short term.'