MWB announced that occupancy levels across its European portfolio of 44 business centres fell from 88% to 72% between January and June 2001. And the decline has accelerated since then with occupancy falling to 61% by the end of August. Much of this can be explained by a spate of new openings - during 2001 MWB has increased its number of workstations from 8,872 to 14,797, but it has left the company vulnerable to the economic shock post-11 September.

And David Alberto, Managing Director of MWB Business Exchange admitted that the decline in demand and increase in supply had hit rental levels. Achievable rents in Germany--where MWB is least exposed--are down 35% to 40%; in the Netherlands they are down 25% to 30%; and in France and the UK --MWB's biggest markets--rents are down 10% to 20%. Alberto said the figures in the American markets were likely to be even worse although MWB had no exposure there.

Marylebone Warwick Balfour also faces a downturn in its hotel businesses. It owns and operates the Malmaison chain of designer hotels in the UK, where occupancy levels had held steady at 83% before 11 September, in spite of the impact of foot & mouth on UK tourism. In addition MWB owns the Howard hotel in London, operated by Swissotel, and it is building two new London hotels for Marriot and one for SAS Radisson.