The main drop in activity has been during the last six months, and is largely attributable to the significant cooling of the US economy, reflecting the fact US-based companies, attracted by the proximity to Heathrow airport, form a large part of the area's occupier base.

South East office agency director Mark England said that, while the changes in activity need to be placed in the context of a strong market during 2000, they are still quite marked. 'Development activity has also levelled, with very little new speculative development having started in the last six months,' he said. 'There are now 3.5 million sf of offices under construction, which will inevitably lead to further increases in supply given the current market conditions.'

However the report anticipates that activity should improve in the first half of 2003 as confidence returns.

England forecast: 'With an anticipated resurgence in output during 2003, we do not foresee a return to the problems that afflicted the market in the downturn of the early nineties, with vacancy rates currently ten percentage points below their levels of ten years ago.'

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Leasing
Office