In the City market, availability has reached its highest levelsince 1993, resulting in a 5% decline in prime rents and IRE saysthere is a strong likelihood of further falls before the end of theyear. And performance was no better in the West End, where take-upfell from 1.1 million sf to 490,000 sf. The largest deal of thequarter saw 32,000 sf let to Elexon at British Land's 350 RegentsPlace.

But IRE says some major deals have been struck in the West Endsince the end of the quarter, giving rise to hopes of an upturn inthe market. Marks & Spencer has leased 70,000 sf at Paddingtonand Viviendi took 42,000 sf at Prospect House.

Insignia Richard Ellis Research Director Peter Damesick said:"Figures for the third quarter are very much as expected but thereis a definite contrast between the performance and indicators forthe West End and City office markets. There are signs that the WestEnd market will recover first and the low levels of future supply,combined with a diverse tenant base less reliant on globalfinancial markets, support this view. If the internationalgeopolitical situation is resolved, we are optimistic thatavailability in the West End will peak in the course of 2003 andrents could see some recovery soon after.