The result, according to LSH's latest West End Office Market Bi-monthly Summary is that prime rents have softened from £87.50 ($123) to £80 ($113) per sf over the year. And the firm warned that a two-tier market is being created as tenants return Grade A space to the Mayfair and St James's market at around £65 ($92) per sf.

Lambert Smith Hampton Analyst Arezou Said said: 'The high levels of activity in the first half of 2001 gave way to a much quieter second half. There has been a significant increase in availability as occupiers have placed surplus space back on the market and have put their expansion plans on hold. While the outlook for the UK economy remains uncertain, we predict economic growth for 2002 will be positive. This should help sustain demand and boost rental growth.'

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