Figures confirm continuing decline in office development
Commercial building starts dipped further last year, reflecting the continuing slowdown in office development. Government data shows approvals for work to start on commercial projects involved 2.8 million square feet in usable floor area last year. This was down 21.5 per cent year on year.
They consisted of 12 fully commercial projects providing 1.8 million sq ft, with another one million sq ft in residential-related mixed developments. The figures cover floor area for both office and retail uses.
In 2000, 32 pure commercial projects were approved. Last year's building activity was also far below the levels in 1996 and 1997 before the Asian financial crisis. Work began on projects totalling 10.7 million sq ft of commercial floor area in 1996, compared with 6.4 million sq ft in 1997.
Given the weak demand for offices and the economic slowdown, office rents fell sharply last year. Analysts said this discouraged new project initiatives while some developments were being postponed.
Completions of commercial floor area amounted to 1.8 million sq ft last year, up about 7 per cent year on year. This compared with 9.38 million sq ft in 1998 and 6.5 million sq ft in 1999.
With the reduction in building starts over the past two years, completions are expected to drop further.
Construction of industrial buildings also slipped to a new low last year, with approvals of 14 projects with a mere 492,000 sq ft of usable floor area.
This was 64.6 per cent less than in the previous year, when 20 projects with 1.3 million sq ft of floor area were begun.
Completions of industrial buildings were about 764,000 sq ft, down 31.3 per cent year on year.
Completions were about 4.2 million sq ft in 1997 and 4.3 million sq ft in 1998.