Greg Nicholson, CBHP's Head of Investment, says: 'The prospectsfor the economy are uncertain and we appear to be heading for aperiod of slower growth as a result. The impact of the slowdown inthe US on both the UK economy and property market appears to berelatively muted at the moment, but occupiers and investors aremaintaining a watching brief.'

Other parts of central London are still seeing growth, however.City rents grew 1.8% in the quarter and 19.7% on the year, whilethe Midtown market was the strongest in London, with 6.5% growth inthe quarter and 28.8% in the past 12 months.

Nicholson agrees that the market was patchy. 'Certain sectorswill be more directly affected than others, with corporaterequirements in the Thames Valley the greatest area of concern,' hesays. 'There are a number of markets--including high street shopsand West End offices--where some headline rents have begun to easeback. However, these are generally areas where values have risenrapidly over the last two years and rents have eased back to moresustainable levels.'

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