TNAG-2967-FCO40-4246-Future-of-Hong-Kong-British-Consulate-General-inclusion-of--1993 — Page 16

07-OCT-1993 17:00

M.P.G.

081 667 0705

Copy que Сори

7.0.

19

60 STC

FOREIGN AND COMMONWEALTH OFFICE, OVERSEAS ESTATES DEPARTMENT APOLLO HOUSE, 36 WELLESLEY ROAD, CROYDON, SURREY, CR9 3RR, UK FAX No. (081) 667 0705. TRANSMISSION QUERIES TO (081) 760 8165

OF ONE PAGE

FACSIMILE

TRANSMISSION

Russ Jarvis, Management Officer, BTC Hong Kong

Stephen Whittle, DED, Rm. 307, Apollo House, Croydon.

TO:

FROM:

DATE:

7 October 1993

Russ

4063

ছি

NEW BC-G OFFICES; HONG KONG

BCC RENT

PRIORITY

1. I've spoken to Alex Smith and Ray Sime, the new Area 1 Manager', following your telephone call this morning and neither recognize the formula you quoted for assessing probable rents.

2. I think that Derek Savage spoke to the Chamber in terms of a "licence fee" rather than rent. Be minuted to HK Dept. on 2/8/93 that the basis upon which such a licence fee would be calculated would. be six percent of the apportioned cost of construction, plus the actual utility/ service costs and also any premium that might be demanded by the Grantor for a variation of the PTG. This assumes the application of the minimum 6% TDR Treasury rule (under Treasury's "Technical Guide for Government Departments Economic Appraisal in Central Government") and we are by no means certain that this would be a correct interpretation of this rule). This rent would also be subject to index linked increases.

3. Assuming the Chamber take the 104 sq.m. currently shown then the calculation would then be :-

!

£27,550,000

X

104 16,642

6

£10,330 per annum

100

The 2 July Steering Committee minutes record that the BCC have been told that they will pay "a fair rent”. A commercial rent for space in new purpose built premises could be expected to be in the region of ax$ 50 per month per sq. ft. say £60,000 per annum. Typical service charges can be estimated at HK$ 4.5 per month per sq.ft. say £5,250 per annum.

-

4. I should add that OED's view is that the commercial rent is thought to be most appropriate in this case unless there are overriding political arguments for the inclusion of the BCC.

Regards,

Stephen Whits

Stephen Whittle

ORD Project Manager