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LONDON-Demand for offices in Soho and the area north of Oxford Street, W1, , has fallen away sharply since 11September, according to new research from Lambert Smith Hampton. These areas are dominated by media, IT and telecoms businesses which were already under pressure from the economic downturn. But the Victoria and Westminster office markets, dominated by Government and related businesses, are holding their own and could even see increased take-up says LSH.

But across the West End as a whole occupier demand is slowing and availability is rising, especially Grade B space as occupiers downsize to mitigate liabilities. By releasing space for assignment at historically low passing rents, this process is exerting downward pressure on rents as a whole, according to Matthew Warner, Head of Office Agency and Development at LSH.

In contrast, Victoria is somewhat cushioned from the downturn. LSH research shows that 57% of occupiers are in the government sector, while media companies account for only 4%. Warner said: ‘The government appears to be expanding, and is likely to continue to do so. The stability of government requirements, which are far less negatively influenced by the current economic cycle than the private sectors’ demand for space, is helping to maintain this sector.’

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