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At 242,000 square metres, completions in 1996 were slightly down from the 1995 level. Take-up remained negative at 273,000 square metres. Vacancy at the year end rose sharply to around 2,125,000 square metres, which was about 11.9% of stock. The rise in vacancy was largely in the existing stock.
In the light of falling demand and high vacancy rate, completions in 1997 are expected to fall to 177,000 square metres. Nearly 20% of the anticipated completions are potentially Industrial/Office space, i.c. with planning permission. In 1998, completions will rise again to about 350,000 square metres, 30% of which are potentially Industrial/Office space.
The price and rental indices dropped by 11% and 7% respectively from the end of 1995 levels.
PRIVATE INDUSTRIAL/OFFICE
[This category comprises floorspace in developments with planning permission and lease modification for INDUSTRIAL/OFFICE use, and certified for completion as such.]
Completions in 1996 were 115,000 square metres, 49% up on 1995 levels. The 1996 floorspace, accounting for 50% of the year end stock, comprise & developments, mainly in Kwun Tong and Cheung Sha Wan.
Take-up increased significantly to 76,000 square metres. Vacancy at 106,000 square metres, representing 46.1% of stock, was largely found in the developments completed during the year.
As emphasised in previous property reviews, we only classify space as INDUSTRIAL/OFFICE if developers have successfully obtained planning permission and have instituted modification of the lease conditions of the land. Otherwise, we will continue to classify them as flatted factories.
Completions are forecast at 94,000 square metres in 1997 and expected to rise again in 1998 to 170,000 square metres.
End