Development completions rose 27% in the second and thirdquarters of the year, but only to a relatively modest 75,350 sf. Inall 344,400 sf is under construction in the core West End, up from269,000 sf in March 2001. On this basis, Drivers Jonas concludesthat Mayfair or St James's are not heading for an over-supply ofGrade A.

But the report confirms that top rents in the area have fallenback from £87.50 ($126) per sf to £80 ($115) per sf, and most GradeA offices in the better locations are now being leased at around£60 ($85) to £70 ($100) per sf. And shorter leases and breakoptions are also appearing in the market.

Paul Glinsman, West End Agency Partner at Drivers Jonas said:'Since September 11 the slowdown in the market has been even morepronounced but, despite this, the fundamentals remain strong. Nextyear we should start to see an increase in the number of dealsbeing undertaken - it won't be boom time, but hopefully enough tostop people talking the market into recession'.