TNAG-2126-FCO40-3036-Investment-in-Hong-Kong-1990 — Page 61

CONFIDENTIAL #

8

13.

On commercial property, the demand for office space continued to be supported by steady

growth in the service sectors. Office rentals in the

prime business districts such as Central were

generally stable during the fourth quarter of 1989,

while those in secondary locations registered some decline due to an increased supply of office space. The demand for shopping space, on the other hand,

continued to be held back by the slow-down in local

consumer spending and in the tourist business.

14.

The market for industrial property showed

only limited improvement since June, mainly because

of the weak performance of manufacturing production

and domestic exports in the latter part of 1989. The

only exception was in warehousing and storage

premises, the demand for which remained firm in the fourth quarter, underpinned by the growth in entrepôt

trade.

15.

Caution should be exercised in interpreting

the figures on investment in property, in view of the time taken to complete projects. Capital expenditure

is measured at the time the construction work is

undertaken, while consents to commence work are given

before the work starts, i.e. before any significant

expenditure has actually been incurred, and completions are recorded after all work is finished.

For most projects, it is likely that the highest

level of expenditure falls in a year other than that

in which consent is given or that in which the

project is completed.

326

CONFIDENTIAL #