HONGKONGOFFICEMARKET1CBRichardEllis|Page2Supply,Demand&VacancyinPrimeAreasNewSupply&Take-up(netsqft)VacancyRate(%)-1,000,00001,000,0002,000,0003,000,0004,000,00019901991199219931994199519961997199819992000200120022003200420052006*-40481216SupplyTake-upVacancyRate*AsofMarchCBRichardEllis|Page3Rents(HK$persqftpermonth)02040608010019901991199219931994199519961997199819992000200120022003200420052006CCentralAdmiraltySheungWanWanChaiCausewayBayTsimShaTsuiDecentralisedHKGradeAOfficeRentalDifferences$52$33$25$37$5.5CBRichardEllis|Page4PrimeGradeAOfficeRentalandCapitalValuesTrend01002003004005006007008009001,00019851988199119941997200020032006RentalIndexCapitalValueIndexQ12006Index(Q11985=100)CBRichardEllis|Page5SummaryofMarketConditionsGradeAvacancyratesdecliningandrentalratesrisingAverageHK$55psf/monthinCentralFinancialinstitutionsalreadyoperatingintheSARcontinuetoexpand,whilethearrivalofnewfinancialplayersinHongKongisongoingAIGTowerinCentralisalmostfullyoccupiedAsupplyshortage,mostnotablyinCoreCentral,isattributabletoadipoftheoverallvacancyratetobelow5%Landlords’negotiatingpowercontinuestostrengthen