XN000022-1979-05-21 — Page 7

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6.

MONDAY, MAY 21, 1979

RENTS HARDENED OVER THE YEAR BUT OVERALL INCREASES WERE GENERALLY MODEST. MR. FRY SAID THAT 1979'S REDUCED SUPPLY SEEMS LIKELY TO FORCE RENTS UP, BUT THIS SHOULD BE ARRESTED BY THE EXPECTED GREATLY INCREASED SUPPLY IN 1980.

HE HOPED TO SEE A FAIRLY ORDERLY PROGRESSION OF RENTS AND NOT A DRIVE TO TAKE ADVANTAGE OF WHAT LOOKS LIKELY TO BE A FAIRLY SHORT TERM SITUATION.

PERHAPS THE MOST SIGNIFICANT FEATURE SHOWN IN THE REVIEW CONCERNS THE SUPPLY OF FLATTED FACTORY ACCOMMODATION. COMPLETIONS IN 1978 WERE A RECORD 1.1 MILLION SQUARE METRES, NEARLY ONE-THIRD UP ON THE PREVIOUS YEAR'S HIGH. A FURTHER 1.47 MILLION IS FORECAST FOR 1979 AND 1.1 MILLION SQUARE METRES IN 1980.

THIS MASSIVE ACCRETION OF 3.7 MILLION SQUARE METRES OVER A PERIOD OF THREE YEARS, SAID MR. FRY, WILL HAVE THE EFFECT OF INCREASING THE TOTAL STOCK POSITION FOR THIS CLASS OF ACCOMMODATION BY SOME 50 PER CENT.

ALMOST HALF OF THE YEAR'S SUPPLY WAS IN THE NEW TERRITORIES, AND IN 1980 THE PROPORTION ATTRIBUTABLE TO THIS AREA IS LIKELY TO APPROACH 75 PER CENT.

OVER 60 PER CENT OF THE SUPPLY COMPRISED SMALL UNITS OF LESS THAN 200 SQUARE METRES. MR. FRY NOTED, HOWEVER, THAT VERY FEW WERE LESS THAN 50 SQUARE METRES, A SIZE WHICH COULD PROVE USEFUL ALTERNATIVE ACCOMMODATION FOR THOSE LIGHT INDUSTRIAL ENTERPRISES LOCATED IN DOMESTIC-COMMERCIAL BUILDINGS.

NOT UNEXPECTEDLY WITH SUCH A SUPPLY, VACANCIES INCREASED TO 472,800 SQUARE METRES. HOWEVER, THIS DOES NOT INDICATE ANY LESSENING OF DEMAND, SAID THE COMMISSIONER, POINTING OUT THAT A RECORD AMOUNT OF OVER ONE MILLION SQUARE MÉTRES HAD BEEN TAKEN UP OVER THE YEAR, 1.E. MORE THAN 2-1/2 TIMES THE AVERAGE ANNUAL TAKE UP, 1974-77.

ALTHOUGH RENTS AND SALE PRICES INCREASED BY 17 PER CENT AND 19 PER CENT, RESPECTIVELY, OVER 1977, MR. FRY SAID THAT THE INCREASED VACANCY POSITION AND THE CONTINUING HIGH SUPPLY SHOULD HAVE A RESTRAINING EFFECT.

INDEED, HE NOTED THAT IN CERTAIN AREAS THERE WERE CLEAR SIGNS OF A LOWERING OF RENTS FROM FORMER PEAK LEVELS.

THE FOLLOWING ARE THE MAIN STATISTICS IN THE PRIVATE SECTOR FOR THE YEARS 1977 AND 1978 TOGETHER WITH FORECAST FIGURES FOR 1979 AND 1980: