GVA Grimley's head of research Stuart Morley says: 'Our figuresindicate that rental growth will weaken over the next two years,bottoming out in 2002/3, before recovering in the subsequent twoyears.' Morley says that offices would remain the best-performingsector, and London the best-performing location.

London office rents grew by 10.2% on average over the 12 monthsto June 2001, and GVA Grimley is forecasting that this rate willfall to an average of 3.5% per annum over the next five years. Thiscompares with an average growth rate of 2.7% per annum across theUK.

Average retail rents are expected to grow at 2.6% per annum overfive years, down from 3.7% this year. However, retail warehousesare expected to outperform other retail sub-sectors with 2.9%growth, while shopping centres will underperform slightly at 2.5%.Industrial rents grew by an average 5.3% over the past 12 months,but this rate is expected to fall to 2.8% per annum over the nextfive years.