He said: "Notwithstanding quieter market conditions in recent months, there is some evidence that the central London office cycle is at or near bottom." Tye added that Rugby was unlikely to make any significant acquisitions before 2004 and that some disposals were possible in the near future.

The comments from Tye follow the statement by Benchmark chief executive Nigel Kempner last Wednesday when he predicted West End rents would start to recover at the end of 2004.

Rugby also announced pretax profits of £3.9 million ($6.5 million), down from £17.2 million ($28.6 million) for the first half of 2002, when the profits were boosted by the £62 million ($103 million) sale of Rugby's Covent Garden property portfolio into the Covent Garden Limited Partnership (CGLP).

Disposals during the half-year totalled £14 million ($23.3 million), principally comprising the sale of Bourne Retail Park in Salisbury and two buildings in Clerkenwell, London EC1, leaving the value of Rugby's portfolio at £42 million ($69.8 million).

Tye said: "The market for investment properties continues to be strongly priced while occupational demand in certain markets, particularly central London offices, continues to be weak. We believe that acquisition opportunities will be more attractive in 2004 than at present, both for the group's wholly owned portfolio and for those managed by Rugby Asset Management."