TNAG-1636-FCO40-2252-Visits-by-FCO-officials-to-Hong-Kong-1987 — Page 76

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but they would be reluctant to precipitate a similar

request from the Chinese for a prime (and high-profile)

site of their own.

18. On the second option, space can either be bought

or leased in an existing or planned commercial office

building without undue difficulty. There is a temporary

shortage of space in the market at present but this is

expected to ease early in 1988 when a number of buildings

now under construction will be completed. Land and

office space values depend on demand, which in turn

hinges on financial stability.

Continuing growth cannot

be relied upon and, as 1997 draws nearer, it is likely

that there will be a period of uncertainty during which

prices may fall back. Although from a financial point of

view that might be the time for us to strike a deal, it

is essential to press on with our planning in the

meantime.

19.

When our requirements are more firmly established,

suitable buildings can be identified and, again,

agreement perhaps reached with the owners or developers

to incorporate special facilities for us. The economic

advantage at present lies in buying, if tenure through to

2047 can be assured. The best strategy might be to

acquire suitable premises with a substantial

overprovision based on maximum demand forecasts, to move

into them prior to 1997 some of the sections, and

sub-let surplus space to third parties until required by

the Consulate-General.

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