LONDON-The City of London was beginning to feel the impact of an economic slowdown even ahead of 11 September, according to new research from King Sturge. Although take-up increased by 20% to 1.3 million sf during the third quarter of 2001, availability rose by 20% on the quarter to 2.9 million sf, taking the vacancy ratio to 4.5%.
Just four large pre-lettings account for 53% of the entire take-up figure. Mark Bourne, City office partner at King Sturge said take up was already beginning to slow towards the end of the third quarter. ‘It must be remembered that there was already economic uncertainty prior to the recent events in New York,’ he said, ‘and many City businesses have been re-evaluating their property requirements for some time.’
Bourne said rents are currently ‘flat’ and there is now some downside risk for the immediate future.However, he forecast that, with no construction starts in this last quarter, the City will suffer a shortage of prime space in 18 months time.