(FORTUNE Magazine) – More irony than ecstasy greeted the topping out last month of the tallest buildin in Europe's largest commercial development: Olympia & York's 50-story, $8 billion Canary Wharf project on London's eastern edge. The event emphasized that real estate prices in London are slumping, while expansion in cities on the Continent continues unabated. Prime commercial rents in the City, London's financial district, have dropped up to 14% in the past year, and the glut of new office space is starting to drag down rents in the fashionable West End business district as well, according to surveys by real estate consulting firms Healey & Baker in London and Cushman & Wakefield in New York City. Even so, London is by far the most expensive European capital for commercial space. Annual occupancy costs can reach $177 per square foot. In contrast, costs in Paris rose 25%, to $100 per square foot, for the year through September; and in Milan, 29% to $77. Frankfurt's burgeoning banking district -- up 25%, to $60 per square foot -- has been outpriced by Berlin, where space in the chronically undersupplied business center has risen 37%, to $70 per square foot.

For now, Brussels and Amsterdam look like bargains. They've increased 15% and 28%, respectively, to the same $27 per square foot. But Brussels prices will probably increase annually by at least 15% over the next two years as new firms arrive in the EC's capital to grab a piece of the unification action.