Development completions rose 27% in the second and third quarters of the year, but only to a relatively modest 75,350 sf. In all 344,400 sf is under construction in the core West End, up from 269,000 sf in March 2001. On this basis, Drivers Jonas concludes that Mayfair or St James's are not heading for an over-supply of Grade A.

But the report confirms that top rents in the area have fallen back from £87.50 ($126) per sf to £80 ($115) per sf, and most Grade A offices in the better locations are now being leased at around £60 ($85) to £70 ($100) per sf. And shorter leases and break options are also appearing in the market.

Paul Glinsman, West End Agency Partner at Drivers Jonas said: 'Since September 11 the slowdown in the market has been even more pronounced but, despite this, the fundamentals remain strong. Next year we should start to see an increase in the number of deals being undertaken - it won't be boom time, but hopefully enough to stop people talking the market into recession'.