Demand for grade A office space in London fell in the second quarter of this year, according to a report by property firm Chesterton.
Although there has been strong demand over the quarter, the 'frenetic' activity seen last year has not been replicated. But demand remains above the five-year average in central London.

Take-up decreased in the West End and the City, from 1.3m sq ft and 2.4m sq ft to 982,000sq ft and 1.8m sq ft, respectively.

In the 'mid-town' area take-up fell by 56 per cent due to the declining numbers of pre-lets. Docklands was the only area to boast an increase in take-up from 1m sq ft to 1.6m sq ft — a best quarter record — thanks to a 1m sq ft let to investment bank Lehman Brothers.

According to the report, an increase in the availability of grade B office space had a knock-on effect on grade A availability and resulted in an increase in office vacancy rates.

Vacancy rates were greatest in the West End, representing an increase of 1.6 per cent on the first quarter of the year.

The report concludes that the market 'is seeing a cooling from the excesses of 2000. But with continuing strength in the service sector and low vacancy rates, rents are unlikely to come under pressure in the near term.'

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The Facilities Business