The prolonged downturn in the technology sector--which has traditionally been the bedrock of Western Corridor demand--has hit take-up hard. Although take-up improved slightly in the final quarter of 2001 to 496,000 sf, the total for the year--at 2.38 million sf--was significantly down on 2000's record 6.4 million sf. And it is one-third below the average for the last six years.

Availability rose by three-quarters during 2001 to 5.3 million sf. At the same time the development pipeline is continuing to increase, with 3 million sf of speculative space under construction. Combining available and under-construction space gives a total vacancy rate of 8.1% of stock, CB Hillier Parker calculates.

And there is little prospect of an improvement in the market in the short term. CBHP's latest Western Corridor Market Index points out the strong reliance on US-based occupiers. With the USA officially in recession, CBHP does not expect letting activity to pick up until early 2003, with rental growth not emerging again until later that year.