TNAG-1587-FCO40-2171-Future-of-Hong-Kong-British-Consulate-General-1986 — Page 44

CONFIDENTIAL

Mr M Bertram

Head of Overseas Estates Dept

FCO

CON

Reference.................

18

HONG KONG: ACCOMMODATION AFTER 1997

1. A number of points arose during our discussion at lunch. yesterday with the Chief Secretary:

a) The Chief Secretary said he could not understand why the

FCO lawyers should have any doubt about title for property that might be leased by Her Britannic Majesty's Government for the Consulate-General. He (and Mr Margolis, the Deputy Political Adviser) said HBMG would be in the same position as any other leasee: leases signed before 1997 were specifically covered by the Joint Declaration and would continue in effect.

b)

c)

d)

Perhaps the lawyers had assumed that the acquisition of property for the Consulate-General would be effected by arrangements with the Hong Kong Government with, perhaps the Hong Kong Government giving HBMG a plot or plots of land to develop. Any such arrangement would, of course, need to be discussed with the Chinese.

So far as office accommodation was concerned, the Chief Secretary thought HBMG would be well-advised to identify what was needed and buy it now. He suggested that the accommodation could be leased to another tenant until we were ready to occupy it. Alternatively we could enter into an arrangement with a developer whereby we commissioned the accommodation and leased it back to the developer to rent to others until we needed it. In this way we might be able to recoup our outlay before Occupying the premises. With regard to residential accommodation, he said the Hong Kong Government would have some surplus houses and apartments in the next two or three years.

He suggested we arrange to buy them from the Hong Kong Government by private treaty and occupy those we could use now; renting the rest to others. private treaty he did not mean a special deal.

By

In response to my question the Chief Secretary said he could not say if the UK would have any residual financial benefit in the property that had been built or acquired under the defence agreement (75% Hong Kong and 25% UK- financed). Any such benefit would be a windfall: we should not bank on it in planning for the Consulate- General.

нни wool

406

RECEIVED IN REGISTRY

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- 8 MAY 1986 ·

DUGISTRY

12. I think

CODE 18-77 AWO Ltd. 7/84

CONFIDENTIAL