The report analysed the take-up in the prime areas of Central London, Paris, Madrid, Barcelona, Frankfurt and Brussels and the results make dismal reading. Take-up in Paris is down by 40% while the Frankfurt office market has dropped by nearly 38%.

Michael Haddock, CB Hillier Parker's associate director responsible for market analysis, says, 'Last year's rate of rental growth was clearly unsustainable and if continued through 2001 could only have resulted in a more severe correction at some time in the future. There are reasons to be concerned about the future prospects for the market.'

The situation is not entirely gloomy. The current slowdown in demand may bring some benefits, according to Nick Axford, head of research at CB Hillier Parker. 'From the occupier's perspective, the current slowdown has been crucial,' he says. 'The office markets in most European capitals have vacancy rates well below those for them to operate efficiently. A higher level of vacancy will avoid an exodus of major companies in search of quality space at affordable rents.'