The most significant deal so far this year has been Lazards' decision to lease 130,000 sf in Burford's Mayfair place development. But the rent agreed--£75 ($110) per sf--compares with more than £85 ($125) achieved last year. And the report says the fall in rents is mirrored in other West End sub-markets. Victoria, for instance, has seen prime rents fall from £57.50 ($85) to £52.50 ($75) per sf in a year.

And the broker warns: "The prospects for rental growth this year remain weak as uncertain global economic prospects restrict employment growth and hence requirements for space. We expect the economic outlook to improve significantly in 2003 and whilst in theory this should stimulate rental growth in the West End , we urge caution as the extent of additional surplus space coming to the market has yet to be seen."

However, some significant deals are in the pipeline: BP Amoco is reportedly looking for 150,000 sf with the Enron HQ at 40 Grosvenor Place and HRO's refurbishment in Buckingham Palace Road on the shortlist. And Insignia Richard Ellis is rumoured to be ready to quit Berkeley Square in favour of Kingsley House in Wimpole Street.