LONDON-Fears of a slump in the UK property industry look far more accurate than many forecasters have been suggesting according to a report released today.

International property consultant, CB Hillier Parker, has reported that take-up of office space in the Western Corridor, UK’s equivalent to Silicon Valley in California, in the second quarter of the year has plummeted to the lowest level since 1996, and is almost 60% down on the first three months of the year.

Availability of offices along the Thames Valley at the end of June hit 3.6m sq ft, a 14% increase on the year-end level due largely to the slump in US hi-tech companies which have assiduously taken space in and around Berkshire and the London end of the M4 motorway. Almost two thirds of all transactions in the last five years were based in the sector. The spin-off from the down-turn in the US market has also had a grim impact on rental growth, which has weakened drastically since the start of the year. Rental values have improved by just four per cent in the first six months of 2001 and by a meagre one per cent in the second quarter.

Demand has also fallen significantly with completed deals amounting to only 496,00 sq ft, the lowest level since 1996 and almost 60% below that recorded in the previous quarter. Pre-lets have been particularly affected according to CB Hillier Parker’s director, Mike Ayton. He said, ‘Circumstances which drove the pre-letting activity in 2000 have altered completely in the first six months of 2001 with profits’ warnings, concern over future revenue and cash-shortages experienced by many hi-tech companies.’

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