CONFIDENTIAL
LINE TO TAKE
1. THE PRICE OF PROPERTY IN HONG KONG NOW MAKES IT CHEAPER THAN BEFORE FOR AN OVERSEAS COMPANY TO SET UP BUSINESS IN HONG KONG. 2. THE EXPECTED UPTURN IN THE WORLD ECONOMY WILL UNDOUBTEDLY ATTRACT MORE INTEREST BOTH LOCALLY AND OVERSEAS IN THE PURCHASE OF PROPERTY IN HONG KONG.
3. THERE ARE SIGNS OF GREATER INTEREST SUGGESTING A BOTTOMING OUT OF THE MARKET.
4. THE CURRENT OVER-SUPPLY SITUATION HAS LED TO A SLOW DOWN OF THE CONSTRUCTION INDUSTRY AND THE HOLDING BACK OF PROPERTY DEVELOPMENT TO ADJUST TO MARKET DEMAND.
TRC'S PROPERTY DEVELOPMENT
5. APART FROM ADMIRALTY LOT 11, THE REMAINING GRANTS LAND TO MTRC ARE BEING PROCESSED. THE GOVERNOR-IN-COUNCIL RECENTLY AGREED
TO A REVIEW OF THE PROGRAMME FOR THESE GRANTS, TAKING ACCOUNT OF THE CURRENT STATE OF THE PROPERTY MARKET. THIS REVIEW IS NOW BEING IMPLEMENTED.
LINE TO TAKE
1. THE CONSTRUCTION OF THE ISLAND LINE WILL NOT BE DELAYED. THE PROPERTY MARKET IS EXPECTED TO RECOVER AND THE MTRC CAN THEREFORE BE EXPECTED TO GAIN BENEFITS FROM PROPERTY DEVELOPMENT BUT
PERHAPS NOT TO THE EXTENT ORIGINALLY FORECAST. ADDITIONAL COMMERCIAL BORROWINGS WILL MAKE UP ANY SHORTFALLS IN ANTICIPATED PROFITS FROM PROPERTY DEVELOPMENT.
2. EVEN WITHOUT THE PROFITS FROM ISLAND LINE PROPERTY DEVELOPMENT, THE TOTAL DEBT REPAYMENT PROGRAMME OF THE MTR (INCLUDING THE MIS, THE TWE AND THE ISLAND LINE ITSELF) WOULD ONLY BE PUT BACK BY THREE YEARS TO 1996.
YOUDE
MINIMAL HR G G D
THIS TELEGRAM
WAS NOT
ADVANCED
COPIES
HK GO
TO:-
LONDON
-2- CONFIDENTIAL
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