Private-office completions are due to plunge to 140,000 square metres this year and further to about 120,000 square metres next year after two years of abundant supply, according to the Rating & Valuation Department's Hong Kong Property Review 2009.

Grade-A space forecast completions in 2009 are 113,000 square metres, all in non-core districts of Kwun Tong and Yau Ma Tei. The two districts will contribute 80%, or 97,000 square metres, 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 metres of Grade-A space in 2010. Grade-B space completions will rise to 19,000 and 23,000 square metres this year and the next.

Last year saw 341,000 square metres in offices completed, slightly higher than the 2007 level. Grade-A space completions were 331,000 square metres, all in non-core districts and more than half in Kwun Tong.

Overall take-up rose to 345,000 square metres. Vacancy edged down to 8.4%, or 873,000 square metres, due to demolition during the year - with the vacancy rate of Grade-A offices standing at 8.9%, with Grade-B and Grade C at 6.9% and 8.6%.

On the domestic front 14,740 units are due for completion this year, with 76% in the New Territories and mainly in Tseung Kwan O and Sha Tin. A further 12,600 units will be supplied in 2010 - 64% in the New Territories with Yuen Long contributing 30%.

There were 8,780 unit completions last year. Of them 52% were in the New Territories, 31% in Kowloon and 17% on Hong Kong Island. Tseung Kwan O remained the largest supplier (24%), followed by Sha Tin (20%) and Sham Shui Po (13%).

As some large developments were completed near the end of the year, take-up of 6,890 units was less than the year's completions, and vacant units rose to 52,940, or 4.9%, of total stock.

Secondary-market prices took a downturn in the second half of 2008. The overall price index for the last quarter fell 5% on a year earlier. The rental index showed a 1% drop over the same period.

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