Office completions forecast to fall in HK

HONG KONG, March 5 (Chinese media) -- Hong Kong's private-office completions are

due to plunge to 140,000 square meters in 2009 and further to about 120,000

square meters in 2010 after two years of abundant supply, according to the

Rating and Valuation Department's Hong Kong Property Review 2009 released

Thursday.

Grade-A space forecast completions in 2009 are 113,000 square meters, all

in non-core districts of Kwun Tong and Yau Ma Tei. The two districts will

contribute 80 percent, or 97,000 square meters, of the anticipated Grade-A space

in 2010.

Supply in core office areas remains tight and Central will likely see the

completion of 9,700 square meters of Grade-A space in 2010. Grade-B space

completions will rise to 19,000 and 23,000 square meters in 2009 and 2010.

There were 341,000 square meters in offices completed in 2008 in Hong Kong,

slightly higher than the 2007 level. Grade-A space completions were 331,000

square meters, all in non-core districts and more than half in Kwun Tong.

Overall take-up rose to 345,000 square meters. Vacancy edged down to 8.4

percent, or 873,000 square meters, due to demolition during the year - with the

vacancy rate of Grade-A offices standing at 8.9 percent, with Grade-B and Grade

C at 6.9 percent and 8.6 percent.

On the domestic front 14,740 units are due for completion this year, with

76 percent in the New Territories and mainly in Tseung Kwan O and Sha Tin. A

further 12,600 units will be supplied in 2010.

Secondary-market prices took a downturn in the second half of 2008. The

overall price index for the last quarter fell 5 percent on a year earlier. The

rental index showed a 1 percent drop over the same period.