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LONDON-The regeneration of London’s Victoria district could be jeopardized by the financial and political problems surrounding rail infrastructure company Railtrack, according to brokers Cluttons.

Just four months ago, a Cluttons report hailed Victoria as offering the greatest growth potential of all of the West End’s sub markets with the station playing a key role. Railtrack planned 750,000 sf of new offices plus improved access and transport links.

But now Cluttons’ Central London Research Analyst Melanie Bayliff says: ‘Railtrack has told us that the already delayed station redevelopment is still due to go ahead – although doubts must surely remain. Our concern is that if it is delayed further, or even abandoned, other developments that would also have played key roles in the revitalisation of Victoria, may also be rethought or shelved. This development domino effect could undermine the ‘new Victoria’ that looked so promising just a few months ago.’

Although Victoria has a full development pipeline with 1.9 million sf of space with planning consent and a further 767,000 sf at the planning application stage, there are very few new developments actually being built and construction activity is at its lowest level since 1993.

Over the past four months, total office availability in Victoria increased by 29% to 522,839 sf, pushing the vacancy rate up from the June 2000 low of 1.8% to the current level of 3%. Top rental values have fallen by almost 10% this year from the £57.50 ($84) per sf high which was achieved in February 2001 to £52.50 ($76) per sf in October 2001, making new development even less likely.

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