TNAG-1587-FCO40-2171-Future-of-Hong-Kong-British-Consulate-General-1986 — Page 45

CODE 18-77

HP 4/83

"CONFIDENT LAL

Reference..

2 -

2. I think we should keep in mind that there will be peaks and troughs in the property market leading up to 1997 and it would be in HBMG's interest to buy when the prices are most advantageous. This might best be done on the commercial market rather than in association with the Hong Kong Government (who will want to sell their surplus property at the best possible price).

It

3.

I also think HBMG should explore the question of whether it will have any residual right in the defence property. would be very difficult to negotiate a cash return on this from the Chinese authorities but I wonder if it might be somewhat easier to suggest to them that we should retain perhaps one piece of defence property in lieu of our 25% interest in the rest. Mr Margolis mentioned that the defence arrangements were due to be renegotiated soon. may care to persue this point in London before the negotiations take place.

You

BWA.

R E Holloway 4 March 1986

REH/eb

CONFIDENTIAL

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