TNAG-1762-FCO40-2516-Economic-situation-in-Hong-Kong-1988 — Page 16

CONFIDENTIAL # 3

10.

(a) General situation

The property market remained active

in the third quarter of 1988.

11.

The demand for shop space continued

to be supported by a high level of retail

sales to both local residents and tourists.

The vacancy rates in popular shopping

districts were low. As a result, a continued

increase in prices and rentals was recorded

in most areas, with more notable increases

for shops in Tsim Sha Tsui. Meanwhile, the

strong demand for office space was sustained

by the flourishing entrepôt trade and the increasing importance of Hong Kong as a major

commercial and financial centre in the

region.

The situation particularly in

Central is expected to remain tight in the

coming months. Prices and rentals for office

space continued to rise generally.

12.

The demand for industrial property

in the established industrial areas such as

Cheung Sha Wan, San Po Kong, Kwun Tong and Kwai Chung held firm in the third quarter, with prices and rentals in these areas

showing mild increases. Prices and rentals

for industrial property in the newer areas

such as Fo Tan and Tuen Mun showed little

change, however, given the abundant supply of

new space that has become available over the

C.F. 326

CONFIDENTIAL #