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LONDON-Rental and capital values for offices in London and the South East of England are still falling, according to the latest Insignia Richard Ellis Monthly Index, with Central London office rents slumping by 10.9% in the year to July 2002, and capital values falling by 5.7%.

This poor performance is affecting the whole UK office sector, with July returns of just 2.8% for all UK offices compared with 5.8% returns for all offices outside of the South East. Total returns in the year to July slowed to 4.4%, reflecting average capital values falling by 3% and negative rental growth at -4.3%.

Peter Damesick, Research Director at Insignia Richard Ellis, said: “Compared to the sharp cyclical downturn in London and the Thames Valley, regional office markets outside the South East have been far less volatile and overall have maintained modest rental growth. In contrast to London, regional office markets saw returns improve markedly this year.”

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