This was the year London's skyline was supposed to be transformed by the construction of yet more signature skyscrapers. But with funding increasingly hard to come by and fears that demand for office space will continue to drop, many such projects have now been delayed or shelved. Commercial property values fell by 3.5% in January, on top of a 27% decline in 2008, according to global property advisers CB Richard Ellis (CBG). "The British commercial property market has been the first and fastest to react to the financial crisis," says Peter Damesick, CB Richard Ellis' head of research in Britain.
Witness the number of high-profile projects that have fallen victim to the downturn. Plans for a tower called St. Alphage's in London's financial district—known as the City of London—were canceled after the intended tenant, JPMorgan Chase (JPM), withdrew. And Dutch bank ING (ING) pulled the plug on Frank Gehry's first British project, a $433 million waterfront development in Brighton. "There's been a sharp downturn in new development activity over the last 12 months," Damesick says. "A lot of projects that were in the pipeline are being reassessed."
