Chart 14
Index
140
120
100
80
60
40
20
Prices and rentals of office space
(1999=100)
Rental index
Price index
The Economy 1 63
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1999
2003 1 2004
2000
2001
2002
Rentals for office space showed a steady rise over the course of 2004, along with the general upturn in economic activities. Prices picked up sharply due to a resurgence of buying interest amid a business outlook.
The sales and rental markets for shopping space were generally supported by brisk retail activity amid continued revival in local consumer demand and buoyant inbound tourism in 2004. Retail premises in popular locations and in better-managed shopping malls were in particularly strong demand. In the fourth quarter of 2004, prices and rentals for shopping space rose on average by 40 per cent and 10 per cent respectively over the fourth quarter of 2003, but were on average 31 per cent and 23 per cent lower than their respective peaks in the third quarter of 1997.
On industrial property, with end-user demand strengthened by buoyant export growth and investor sentiment apparently lifted by CEPA, prices for flatted factory space registered appreciable increases throughout 2004. In the fourth quarter of 2004, prices for flatted factory space rose by 34 per cent over a year earlier. Concurrently, rentals of industrial space also picked up, albeit at a much slower pace, by 6 per cent over the same period. Compared with their peaks in 1994, prices and rentals for industrial space in the fourth quarter of 2004 were still significantly lower, by an average of 56 per cent and 48 per cent respectively.
Regarding supply of new property, completions of private residential flats. declined by 1 per cent in 2004 to 26 000 units, smaller than the 15 per cent drop in 2003. On the other hand, completions of office space fell by 6 per cent in terms of internal floor area in 2004, having surged by 80 per cent in 2003. Completions of other commercial premises likewise declined, by 23 per cent in 2004, following a 15 per cent fall in 2003. Completions of conventional flatted factory space in 2004 were only 800 square metres, after nil completions in 2003. There were nil completions of industrial-cum-office space in 2004, following completions of 14 800 square metres