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LONDON-The City of London has witnessed an increase in letting activity after the partial paralysis seen in the final quarter of 2001. According to King Sturge total take-up for the first quarter of 2002 amounted to 586,400 sf, up 46% on the previous quarter.

Rupert Perkins, City office agency partner at King Sturge said: ‘Corporate confidence was shaken to its core last year, and the slow start to 2002 reflects this. We can now see confidence returning to certain sectors and we can look forward to a more active market.’

King Sturge calculates that availability currently stands at 4.65 million sf or 7.2% of total stock, up from just 2.8% a year previously. But 63% of available space is now second-hand, reflecting an increase in occupiers’ disposals as tenants attempt to reduce liabilities by off-loading excess space.

And in the West End, there is a growing trend towards freehold sales to owner-occupiers. In ten separate deals during the first quarter, 117,700 sf of space was sold for occupation, representing 19% of total take-up. Angus McIntosh, Partner and Head of Research at King Sturge said: ‘The low cost of bank finance is resulting in occupiers reassessing their occupational tenure.’

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