XN000022-1978-04-26 — Page 20

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WEDNESDAY, APRIL 26, 1978

THE REVIEW ALSO REFERS TO A SHORTAGE OF ACCOMMODATION AT THE TOP END OF THE DOMESTIC MARKET, AND THE RESULTANT UPWARD TREND OF RENTS AND PURCHASE PRICES FOR SUCH ACCOMMODATION.

IN REGARD TO RETAIL SHOP SPACE, THE COMMISSIONER SAID THAT THE VACANCY POSITION, AT UNDER 1 MILLION SQUARE FEET, HAD NOW FALLEN TO ITS LOWEST LEVEL SINCE 1972, ACCOUNTING FOR ONLY SOME 4 PER CENT OF THE YEAR-END STOCK. THIS WAS DESPITE AN INCREASE IN SUPPLY IN 1977 OF 1.4 MILL FON SQUARE FEET OR 21 PER CENT OVER 1976. AS WITH OTHER CLASSES, COMPLETIONS IN 1978 AND 1979 ARE LIKELY TO BE AT OR NEAR RECORD LEVELS.

A FEATURE OF THE YEAR HAS BEEN THE CONTINUING HIGH DEMAND FOR OFFICE ACCOMMODATION, PARTICULARLY FOR PREMISES PROVIDING A HIGH STANDARD OF FINISH AND SERVICES.

THE TAKE-UP OF THE ACCOMMODATION ESTABLISHED A RECORD AT 2.9 MILLION SQUARE FEET, AND EQUALLED THE AMOUNT OF NEW ACCOMMODATION COMPLETED IN THE YEAR WHICH, IN ITSELF, ESTABLISHED ANOTHER RECORD.

COMPLETIONS IN 1978 ARE FORECAST TO DROP TO ABOUT 2 MILLION SQUARE FEET, BUT THIS SEEMS LIKELY TO BE ONLY TEMPORARY, FOR THE RATE OF COMPLETION IN 1979 SHOULD SET NEW RECORDS AT OVER 3 MILLION SQUARE FEET,

NEVERTHELESS, VACANCIES CONTINUED AT A FAIRLY HIGH LEVEL AND, AT 2.6 MILLION SQUARE FEET, SHOWED LITTLE CHANGE ON THE POSITION AT THE END OF 1976. MUCH OF THIS SPACE IS IN POOR BUILDINGS OR UNATTRACTIVELY LOCATED. SOME 35 PER CENT OF THE TOTAL VACANCY FIGURE WAS IN THE SHEUNG WAN DISTRICT, WEST OF CENTRAL.

REGARDING OFFICE RENTS, MR. FRY NOTED THAT THE POSITION APPEARED TO HAVE REMAINED COMPARATIVELY STABLE, ALTHOUGH SOME INCREASES WERE RECORDED FOR GOOD QUALITY ACCOMMODATION IN THE MAIN BUSINESS CENTRES. ON THE OTHER HAND, RENTS FOR LOWER-GRADE ACCOMMODATION CAME UNDER PRESSURE IN CERTAIN DISTRICTS.

ONE OF THE MOST SIGNIFICANT FEATURES HIGHLIGHTED IN THE REVIEW CONCERNS FLATTED FACTORY ACCOMMODATION.

COMPLETIONS IN 1977 REACHED ALMOST 9 MILLION SQUARE FEET, THAT IS THREE TIMES THE 1976 SUPPLY. A FUTHER 10 MILLION SQUARE FEET IS EXPECTED TO BE COMPLETED IN 1978 AND 13 MILLION SQUARE FEET IN 1979.

WHILE THE TAKE-UP OF FLATTED FACTORY ACCOMMODATION AT 6.5 MILLION SQUARE FEET WAS MORE THAN TWICE THE FIGURE FOR 1976, THE LARGE SUPPLY COMING ON-STREAM DURING THE YEAR INEVITABLY RESULTED IN A LARGE INCREASE IN THE VACANCY POSITION. AT 4.1 MILLION SQUARE FEET THIS IS THE HIGHEST VACANCY FIGURE EVER RECORDED FOR FLATTED FACTORY ACCOMMODATION. HOWEVER, A LARGE PROPORTION OF THE ACCOMMODATION RECORDED AS VACANT WAS, IN FACT, ONLY COMPLETED IN THE LATTER HALF OF THE YEAR.

MR. FRY OBSERVED THAT RENTS FOR SUCH PREMISES, WHICH CONTINUED TO INCREASE DURING 1977, WERE TENDING TO WEAKEN TOWARDS THE END OF THE YEAR AND SOME DOWNTURN WAS NOTED. WITH THE LARGE VACANCY POSITION AND AN INCREASED SUPPLY FOR THE YEAR, THERE SEEMS LITTLE DOUBT THAT RENTS IN THIS SECTOR WILL BE UNDER PRESSURE IN 1978.

ŠTHE FOLIOKLONE

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