MONDAY, FEBRUARY 3, 1986
THE LUXURY END OF THE MARKET SHOWED A MUCH STRONGER RECOVERY AS IT WAS THIS SECTOR WHICH WAS WORST HIT DURING THE PROPERTY RECESSION, HE CONTINUED.
HOWEVER, THE YEAR OF THE OX SAW THE RELEASE OF +PENT-UP DEMAND+ AIDED BY LOW-INTEREST RATES AND AN OVERALL INCREASE IN CONFIDENCE IN THE FUTURE OF HONG KONG.
THERE WERE SIGNS THAT MANY FOREIGN FIRMS WERE SETTING UP OFFICES IN HONG KONG AND REQUIRED ACCOMMODATION FOR THE IR EXECUTIVES.
IN FACT, THERE WERE SIGNS OF A RATHER TOO RAPID INCREASE IN PRICES, BUT WITH THE SUPPLY OF LARGER-SIZE FLATS THE INCREASING DEMAND WAS MET, AND A MORE STEADY RECOVERY WAS NOW APPARENT.
MR POPE SAID THE OFFICE SECTOR HAD SHOWN A SIGNIFICANT IMPROVEMENT AS AT THE BEGINNING OF THE YEAR THERE WAS CONSIDERABLE OVER-SUPPLY AND A LOW OCCUPANCY RATE.
CURRENTLY, IT WAS APPARENT THAT THERE WAS A PRACTICALLY 100 PER CENT OCCUPANCY RATE WITHIN THE TSIM SHA TSUI AREA AND WITH THE LIMITED SUPPLY OF OFFICE ACCOMMODATION IN THAT LOCALITY THIS MAY WELL LEAD IN THE SHORT TERM TO AN INCREASE IN PRICES AND RENTALS.
HOWVER WITH THE OVER-SUPPLY OF OFFICES IN CENTRAL DISTRICT OVER THE PAST FEW YEARS, THERE HAD BEEN A NARROWING OF THE RENTAL SPREAD BETWEEN OFFICES IN CENTRAL AND ELSEWHERE AND THIS WAS ENCOURAGING MOVEMENT BACK TO CENTRAL WHERE HIGH QUALITY OFFICE SPACE WAS AVAILABLE AT REASONABLE RENTALS.
THERE WERE SIGNS, HE SAID, THAT OFFICE ACCOMMODATION IN CENTRAL DISTRICT WOULD BE IN RELATIVELY SHORT SUPPLY OVER THE NEXT FEW YEARS, BUT THIS WAS LIKELY TO BE A TEMPORARY SITUATION AS THERE WOULD BE A NUMBER OF NEW PROJECTS COMING ON STREAM IN 1988.
THEREFORE, OFFICE SALE PRICES AND RENTALS IN CENTRAL DISTRICT WERE NOT EXPECTED TO SHOW MUCH OF AN INCREASE.
THE MOST ENCOURAGING SECTOR OF THE PROPERTY MARKET WAS THE PRICES BEING OBTAINED FOR INDUSTRIAL LAND AND THE IMPROVEMENT IN OCCUPANCY RATES FOR INDUSTRIAL PREMISES, MR POPE SAID.
THE HIGH PRICES OBTAINED FOR INDUSTRIAL LAND IN THE EARLY 1980'S DID HONG KONG NO GOOD AND DISCOURAGED GENUINE INDUSTRIALISTS.
LAND IN KOWLOON BAY INDUSTRIAL AREA WAS CURRENTLY SELLING AT ABOUT HALF THE PRICES OBTAINED IN 1980.
HOWEVER, THIS WAS A VAST IMPROVEMENT ON PRICES OBTAINED IN 1982 WHEN VALUES 1/10TH OF 1980 PRICES WERE REALISED,
/+THERE ARE
--
+