After a sharp climb in prices towards the end of 1996, the strata-title grade A office market has slowed with yields in the first quarter of this year hovering at a low 3.5 to 4.5 per cent, according to Richard Ellis. The property consultant said despite the overall subdued sentiment in the investment market, capital values had continued to increase, although at a much slower rate. At the end of March, Lippo Centre and Nine Queen's Road Central were at $13,000 and $16,000 per square foot, respectively, it said. The company said buyers had become more price sensitive, with end-users targeting more affordable units. Transactions recorded during the quarter were characterised by the purchases by owner-occupiers of smaller individual units as opposed to whole floors. Richard Ellis said expectations of further increases in interest rates might lead investors to become more cautious. Over the coming two quarters, the anticipated stabilisation of prices and rentals at the top end of the grade A office market would increase initial yields slightly, it said. Rents and yields also were expected to firm in Wan Chai and Causeway Bay as occupancy levels remained high. On the retail property market, Richard Ellis said disparity of performance continued, with strong rentals recorded for shops in prime locations, while rentals in secondary locations were still weak, although beginning to recover.