Company officials say rents had risen for quality properties in the West End, central London's retail and theater district, where more than 80% of Great Portland's directly owned properties are located, and that the trend would accelerate during 2006. The supply and demand balance is starting to tilt away from the tenant and toward the building owner, Great Portland leaders say in a statement.

In contrast, the city market is looking tougher. There is more spare capacity and fewer building restrictions, according to chief executive Toby Courtauld, though he adds a pick-up in demand would tighten supply in 2006. "Occupational markets in central London are well-positioned; selective rental growth has returned to the West End and we expect it to accelerate during 2006 as the shortage of quality office space takes hold."

Recent high letting activity in the City of London suggests that "rental growth should re-emerge next year as the oversupply of grade-A office space is eroded," he adds. Much as in the states, "With yield compression likely to abate over the next 12 months, we expect this rental growth to become the main driver to property returns."