XN000022-1994-02-21 — Page 2

1

MONDAY, FEBRUARY 21, 1994

LBAC DISCUSSES PROPERTY MARKET REPORT

THE

(LBAC) DISCUSSED THE LAND AND BUILDING ADVISORY COMMITTEE TODAY (MONDAY) THE HALF-YEARLY REPORT ON THE PROPERTY MARKET FOR PERIOD FROM JULY 1 TO DECEMBER 31, 1993.

THAT THE

A

HON-KWAN, NOTED LBAC, THE

CHAIRED BY MR CHENG PROPERTY MARKET IN THE SECOND HALF OF 1993 CONTINUED TO EXPERIENCE

THE RESIDENTIAL PERIOD OF CONSOLIDATION INITIALLY, PARTICULARLY FOR PROPERTY MARKET.

THE

CONSOLIDATION

WAS

A NUMBER

AUGUST

OF

EVENTS,

BY PROMPTED INCLUDING THE ADOPTION OF FURTHER ANTI-SPECULATIVE MEASURES BY LEADING

LENDING IN MORTGAGE

AND 1993

THE BANKS TO TIGHTEN UP

INTRODUCTION OF AUSTERITY MEASURES BY CHINA.

HOWEVER,

THE

THE RESIDENTIAL MARKET WITH PRICES AND AND RENTALS GOING

COMMITTEE NOTED THAT SHOWED A STRONG RECOVERY AT THE END OF THE YEAR, TRANSACTIONS PICKING UP IN NOVEMBER AND DECEMBER, UPWARDS, PARTICULARLY FOR THE LUXURY SECTOR.

FOR

THE

OFFICE

THE SECTOR,

CONTINUING

STRONG

DEMAND, PARTICULARLY FOR QUALITY OFFICE SPACE IN PRIME LOCATIONS, COUPLED WITH THE LACK OF IMMEDIATE SUPPLY COMING ON STREAM, LED TO A MARKED DECLINE IN THE VACANCY RATE.

EXPERIENCED, SALES MARKET OF

WHILE UPWARD PRESSURE ON THE RENTAL LEVELS WAS PRICES HAD ALSO INCREASED TO RECORD LEVELS IN THE PRIME OFFICE SPACE.

LOCATIONS

LBAC NOTED THAT HIGH RENTAL LEVELS IN PRIME OFFICE HAD DRIVEN SOME BUSINESSES TO SECONDARY LOCATIONS SUCH AS WAN CHAI AND CAUSEWAY BAY, THUS PUTTING PRESSURE ON RENTALS IN THESE AREAS.

STEADY

THE RETAIL PROPERTY SALES AND RENTAL MARKET REMAINED

WHICH HAD BEEN OVER THE PAST MONTHS, WITH THE SALE OF SMALL UNITS

SPACE BEING OF LARGE CREATED

"BREAKING-UP" THROUGH SPECIAL FEATURE OF THE RETAIL PROPERTY MARKET.

COMMERCIAL

A

OF STEADY

AFFECTED BY THE TIGHTENING OF THE MORTGAGE LENDING POLICY

REMAINED SECTOR BANKS, THE SALES MARKET OF THE INDUSTRIAL WHEREAS THE RENTAL MARKET HAD BEEN MORE ACTIVE.

AS

A

THE COMMITTEE NOTED THAT THE PROPERTY MARKET FOR 1993 WHOLE HAD SEEN INCREASES IN PROPERTY PRICES IN ALMOST ALL SECTORS.

THE GENERAL EXPECTED TO EXPECTED

AS AN OUTLOOK, THE COMMITTEE WAS INFORMED THAT MARKET WAS IN THE PROPERTY OPTIMISM WHICH PREVAILED CONTINUE INTO 1994 AS THE TERRITORY'S ECONOMIC MOMENTUM WAS TO SUSTAIN.

FUNDAMENTAL FACTORS UNLESS THERE WERE DRAMATIC CHANGES TO

EXPECTED SUCH AS TO THE LEVEL OF INTEREST RATES, PROPERTY PRICES WERE TO HOLD FIRM AND INCREASE GRADUALLY.

THE

TO

GENERAL WOULD WHILE ACTIVITY IN THE RESIDENTIAL MARKET IN CONTINUE TO BE RESTRAINED BY THE RESTRICTIONS ON MORTGAGE LENDING, COMMITTEE NOTED THAT THE LUXURY END OF THE MARKET WAS ANTICIPATED REMAIN BUOYANT OWING TO LIMITED SUPPLY AND SUSTAINED DEMAND.

/VACANCIES IN