Statistics showed continued improvement this quarter but should be viewed in their long term context. In many cases, sharp improvements in the three months to September were insufficient to reach average levels. The market is improving – but from a low base.

Of more importance, arguably, was the rapid improvement in sentiment over the summer months. This was fuelled by an increasing awareness of the finite nature of the new supply of large units, particularly in the City. For certain product, the balance of power shifted back in the direction of the landlord.

There were no changes to prime rents and we do not expect further falls. The imbalances between the supply of, and demand for, investment product continued driving yield compression. While significant risks remain from the economy, the London office market ended Q3 2009 more optimistically than at any time since the credit crunch.