Across Central London take-up increased 29% to 1.9 million sf,the highest quarterly total since the third quarter of 2002. TheCity of London core sub-market reported the highest take-up ofoffice space since the first quarter of 2001 with 746,458 sf.Across the city as a whole, take-up reached 1.3 million feet, anincrease of 40% over the first quarter of the year.

In both markets, there is a gap in demand for middle-range spaceas occupiers take advantage of historically low rents for newstock. C&W/H&B predicts that, until supply shrinks tolevels that necessitate interest in the middle ground, it will notbe possible to talk of a Central London recovery.

"There is now clearly an uplift in the Central London market,"says Guy Taylor, head of West End agency. "The pace is faster inthe West End than in the city with some record rents set in Mayfairand St. James. The market at the cheaper end has been dominated bythe public sector and at the prime upper end by sectors such asfinance."