ENG-2000 — Page 97

THE ECONOMY

office space in the fourth quarter of 2000 were both markedly lower, by 63 per cent and 36 per cent respectively.

On shopping space, the leasing market had a mild recovery in 2000, underpinned by the sustained growth in retail business. As to the sales market, while some acquisition interest was observed for well-managed shopping arcades in prime locations, retail premises in secondary locations with less adequate facilities and services continued to face weak demand. For 2000 as a whole, prices for shopping space fell by 6 per cent, while rentals for shopping space edged up by 1 per cent. Against their peak levels in the third quarter of 1997, prices and rentals for shopping space were both sharply down, by 53 per cent and 18 per cent respectively.

Chart 16

Property prices and rentals (shopping space)

Index (1999-100)

250

200

150

Price index

100

Rental index

50

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1995

1996

1997

1998

1999 | 2000

The prices for shopping space fell further in 2000, while the rentals for shopping space bounced up slightly.

On industrial property, the leasing market remained sluggish in overall terms in 2000. This was notwithstanding a surge in leasing demand for premises from the information technology firms for use as data centres and back-up service centres. The sales market likewise stayed in the doldrums. For 2000 as a whole, prices and rentals for industrial property fell by 9 per cent and 2 per cent respectively. Against their peak levels in 1994, prices and rentals for industrial property were substantially lower, by 62 per cent and 37 per cent respectively.

Planned developments of property decreased markedly by 16 per cent in 2000, after an increase of 2 per cent in 1999. Within this total, planned developments of residential property declined sharply, more than offsetting the pick-up in respect of commercial and industrial property.

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