XN000022-1982-03-17 — Page 4

OFFICES:

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WEDNESDAY, MARCH 17, 1982

THE SUPPLY OF OFFICE SPACE AT 320 000 SQUARE METRES WAS SOMEWHAT DISAPPOINTING, BEING SOME 100 000 SQUARE METRES BELOW THE FORECAST, ALTHOUGH IT WAS STILL AN INCREASE OVER 1980. MUCH OF THE SHORTFALL SEEMS LIKELY TO BE MADE UP THIS YEAR WITH AN EXPECTED SUPPLY OF 485 000 SQUARE METRES. SUPPLY IN 1983 IS PUT AT 576 000 SQUARE METRES WHILE A FURTHER 500 000 SQUARE METRES COULD BE BUILT IN 1984, THAT IS AN ADDITION OF SOME 1.5 MILLION SQUARE METRES IN THE THREE YEARS 1982-1984, AN INCREASE OF 57 PER CENT ON STOCK AT THE END OF 1981.

TAKE-UP IMPROVED IN 1981 AT JUST OVER 200 000 SQUARE METRES. NEVERTHELESS, IN THE FACE OF AN INCREASED SUPPLY THE VACANCY POSITION ALSO INCREASED TO 302 000 SQUARE METRES, THAT IS AN INCREASE OF NEARLY 49 PER CENT OVER THE YEAR.

WHILE RENTS CONTINUED TO INCREASE IN 1981, MR FRY POINTED TO THE LEVELLING-OUT OBSERVED IN THE SECOND HALF OF THE YEAR AND THE REPORTED DOWNTURN IN ASKING RENTS TOWARDS THE END OF THE YEAR. HE EXPRESSED THE VIEW THAT VALUES WILL LIKELY SOFTEN FURTHER IN 1982 FOR POORER-QUALITY SPACE IN PERIPHERAL AREAS AND SUGGESTED THAT DEVELOPERS OF SOME OF THESE SMALLER BUILDINGS SHOULD, PERHAPS, RE-ASSESS THEIR VIABILITY IN THE FACE OF THE VERY LARGE DEVELOPMENT PROGRAMME IN THIS CATEGORY. THE DEMAND FOR CENTRALLY-LOCATED, GOOD QUALITY SPACE IN WELL-MANAGED BUILDINGS SEEMED LIKELY TO BE SUSTAINED.

FLATTED FACTORIES:

THE SUPPLY OF 1 120 000 SQUARE METRES OF FLATTED FACTORY SPACE IN 1981 WAS FAIRLY CLOSE TO THE FORECAST. ANTICIPATED COMPLETIONS IN 1982 AT 970 000 SQUARE METRES REPRESENTS A SHORTFALL OF 780 000 SQUARE METRES ON THE PREVIOUS FORECAST WHICH SUGGESTS A REPHASING OF DEVELOPMENT PROGRAMMES. MUCH OF THIS SHORTFALL WILL, HOWEVER, BE MADE GOOD IN 1983 WHEN A SUPPLY OF OVER 1.76 MILLION SQUARE METRES IS EXPECTED, WITH A RECORD 2.2 MILLION SQUARE METRES PLANNED FOR COMPLETION IN 1984.

A CONTINUING GOOD SUPPLY, COUPLED WITH A LOWER TAKE-UP OF SPACE, HAS RESULTED IN AN INCREASED VACANCY POSITION. NEARLY 800 000 SQUARE METRES WAS VACANT IN DECEMBER 1981, A 67 PER CENT

INCREASE ON THE POSITION A YEAR EARLIER.

THE COMMISSIONER NOTED THAT RENTS HAD CONTINUED UPWARDS OVER THE YEAR BUT THAT, AS WITH THE OTHER SECTORS, A SOFTENING WAS APPARENT AS THE YEAR CLOSED, PARTICULARLY IN THOSE DISTRICTS WHERE SUPPLY HAD TEMPORARILY OUTSTRIPPED EFFECTIVE DEMAND.

GIVEN THE REDUCED FORECAST FOR 1982 IT SEEMED UNLIKELY THAT THERE WOULD BE ANY SIGNIFICANT CHANGE THIS YEAR, BUT VALUES COULD SOFTEN FURTHER IN 1983. A MORE STABLE MARKET IN THE INDUSTRIAL CATEGORY COULD HELP TO CONTAIN COSTS IN WHAT IS A MOST IMPORTANT SECTOR OF THE ECONOMY.

/CONCLUSIONS:

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