There needs to be a strong recovery if 2002 is to match the annual total for 2001 of 11.1 million sf which in itself was significantly down on the 2000 record figure of 17.7 million sf. However JLL expects the situation to improve: After falls of around 45% over the second half of last year, active demand has recovered by 17% in the West End and 30% in the City as confidence has begun to return and new enquires have emerged.

Jones Lang LaSalle's Head of Leasing, Martin Wallace, said 'Activity began to increase in the lettings market as Q1 progressed and, judging by the volume of transactions under offer, there are signs that this gradual upward trend is likely to continue.'

JLL estimates there is currently 6.75 million sf of speculative space under construction in central London. But it points out that this is only 40% of the level seen at the peak of the last development cycle in 1989. Overall availability has risen over the first quarter to 6.8% of stock. This is having a dampening effect on rents, which are continuing to drift downwards form last year's peak and incentive packages are increasing.