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Where we decide to charge for a service, we shall include in the annual grant to the HA adequate additional provision to cover the charge. It will be for the HA to consider whether to continue to buy that service from the Government, to run the service with its in-house staff or to buy the service from the private sector taking into account the cost-effectiveness and reliability of the alternatives. The HA has agreed that if it decides to terminate a service provided by the Government, it will give at least two years' advance notice so that the government department concerned can make necessary arrangements including redeployment of the staff involved to other duties.

End/Wednesday, December 14, 1994

Office rentals

Following is a question by the Hon Howard Young and a written reply by the Secretary for Planning, Environment and Lands, Mr Tony Eason, in the Legislative Council today (Wednesday):

Question: With regard to the escalating rental levels of office premises, will the Government inform this Council whether it plans to take measures similar to those for residential premises to dampen office prices and thereby rentals?

Answer

Mr President,

According to Government statistics, between the second quarter of 1991 and the second quarter of 1994, office rentals increased by an average of 12.8% per

annum.

The present outlook for the office rental market appears healthy. While supply may be tight in the short term, there will be steady additional supply in the medium term to meet increasing demand. The forecast additional supply in 1994, 1995 and 1996 is 420,400, 537,800 and 570,000 square metres respectively. Most of this will be in Sheung Wan, Tsim Sha Tsui, Causeway Bay and Quarry Bay. Supply will increase significantly after 1996, mainly from development along the Airport Railway and on the Central and Wan Chai Reclamations. Development of I/O buildings will also help increase overall supply of office accommodation and provide flexibility in the response to market demand in terms of type and location.