KOWLOON could benefit from an influx of firms moving from Hongkong Island next year, it was claimed last night. New offices coming on stream is falling throughout the territory. But new supply is set to hit an all time low on Hongkong Island in 1994 - only 646,000 square feet. That is only a fraction of the 1991 record figures which came close to breaching the four million barrier. According to statistics from property experts Jones Lang Wootton, office space in Kowloon and the New Territories is dropping more slowly. The result: in 1994 it will account for 76 per cent of new space throughout the territory, just over two million square feet. The trend can be put down partly to co-incidence. In 1995, the swing is due to move back across the harbour. Mr Nigel Smith, a senior associate director at JLW, said next year would see firms expanding in Kowloon where prices are more competitive. And he believed most would concentrate on decentralised areas away from Tsim Sha Tsui where the vacancy rate was now below five per cent. He said: ''It happens that most of the developments coming on stream in 1994 are in Kowloon. ''It is a major shift. Although it will last for only a short time, I expect to see firms moving across from Hongkong Island.'' Companies would get better value for money, he said, where new prime office space was available to rent at around $20 per sq ft. In Tsim Sha Tsui, rates are as high as $35 and in Central up to $60. JLW is leasing the new Peninsula Square Development in Hunghom, outside Tsim Sha Tsui. Two German-based trading firms, Together Productions and Otto Versand, have leased two floors each totalling 110,000 sq ft. More trading companies are likely to sign up in the near future. Mr Smith was confident that the US economy was showing signs of recovery, especially in the retail sector. For Hongkong manufacturers that was good news, he said. They would find areas such as Hunghom perfect for expansion, especially with the new airport project well underway. Mr Smith added: ''We have had companies which originally took on 1,000 sq ft and then came back shortly afterwards wanting to expand to 3,000 sq ft. ''This is happening more often.'' Overall, 55 per cent of new Grade A supply will be completed in Kowloon in the next two years. Between 1991 and 1993, a record supply came on stream throughout Hongkong, averaging almost five million sq ft net per annum. Most of that was on Hongkong side but, this year, Kowloon side is catching up at 43 per cent. In 1994, Hongkong is expected to account for less than a quarter. The swing moves back the following year. On Hongkong Island, two million sq ft will come on stream, compared to 645,000 sq ft across the river. In 1996, supply increases again with 2.3 million sq ft and 1.1 million sq ft respectively. Kowloon side will narrow the margin in 1997. Supply will drop to 1.5 million sq ft on the island and to one million sq ft on the mainland.
