Take-up in Central London fell by 19% from 2.8 million sf in the third quarter of 2001 to 2.3 million sf in the final quarter. This took the annual total to 13.4 million sf, 30% down on the 2000 record level of 18.5 million sf.

The slump in demand after 11 September has hit the City of London financial district particularly hard, with just 320,000 sf leased in the final quarter after a number of sizeable deals failed to materialise. In the West End, on the other hand, two major deals boosted Q4 take-up to 0.78 million sf, slightly up on the previous quarter.

Total office availability in central London rose by 25% from 11.68 million sf to 14.6 million sf in the final quarter and reflecting this increased supply, rents have come under pressure. Prime rents fell to £60 ($86) per sf in the City market and £75 ($108) per sq ft in the West End, according to the IRE research. But Holborn and Docklands rents remained stable at £55 ($80) and £45 ($65) per sq ft respectively. IRE warns that rental levels are likely to prove vulnerable in the coming months.