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SCMP Reporter

THE Guangzhou Garden Hotel has been the first stop for many businesses wanting to set up representative offices in the city.

  The hotel has converted nine floors of one of its twin towers into office apartments.

  Earlier this year, anyone wanting to rent an office at the hotel faced a six-month wait.

  But the hotel is expecting a decline in demand over the next 12 months.

  Hotel general manager Louis Chung said demand for the units had 'eased off a bit now. I am afraid the coming year will see a surplus of office space'.

  About 6.5 million square feet of space is due for completion next year, with developers' attention focused on the Yue Shiu district near the Garden Hotel and in the Tianhe development zone.

  'Even if economic growth and business development continues [as it is now], I foresee a surplus,' Mr Chung said.

  In addition to the booming economy, demand for office space in Guangzhou is being boosted by the ongoing move by foreign companies into the previously closed mainland services industries. While demand and supply for smaller business units at the hotel was about even, Mr Chung said companies with larger space requirements were more difficult to satisfy.

   'We have a handicap because our rooms were designed as hotel rooms. The walls cannot be knocked down,' he said.

  'It can be a bit inconvenient for businesses unless they are happy with separate rooms.'   The Garden would consider reconverting some of its office space to hotel rooms if demand fell off significantly, Mr Chung said.

  Guangzhou has always had a large proportion of business travellers compared to tourists.

  Mr Chung said this trend had shifted even further in favour of business travel with the improvement of transport and communication links between other China destinations and the rest of the world.

  'Guangzhou is less of a transit point now,' he said.

  The hospitality industry was hopeful the government's initiatives to increase the city's tourism would prove successful.



Hotels see demand fall