LONDON-The take-up of office space in the important M25 office market fell by 36% in the third quarter of 2001 while the availability of space rose by 33% to stand at 0.55 million sf. As a result agents have been cutting asking rents in the western M25 market by as much as 5%. And speculative office development has almost ground to a halt.

DTZ calculates that take up for the first three quarters of 2001 is down 33% on the equivalent period of 2000. But it is still 10% above the level for 1999 during the peak of the boom. The slowdown in take-up has been most evident in the western sector where just 248,000 sf was leased or sold compared 570,000 sf in the second quarter.

Andrew Mason, Director in DTZ’s M25 team, said: ‘The particular exposure of the western sector to the TMT sector has clearly had a significant impact on letting activity. Reassuringly, there has already been a decrease in the volume of new schemes moving through the development pipeline, suggesting that the ability of the market to weather the significantly decreasing levels of demand is reasonably sound.’

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