But fears are being raised that, if they came on to the market all at once, it could cause a crash in prices.

The future of what is known as the defence estate is being negotiated by the Sino-British Joint Liaison Group (JLG).

Details of the negotiations are confidential, but there are sticking points between the two sides.

Urgency has been given to the future of the estate, following the announcement that the Garrison is to be slashed next year, leaving much land and accommodation under-utilised.

China has indicated it wants military land for the People's Liberation Army, which will be stationed in the territory after 1997.

Beijing officials have said they do not want any Garrison property handed over to the Hongkong Government without mainland agreement.

However, Britain is insisting that China needs only enough land to house a token military presence, while the rest can be handed over to the Hongkong Government for social and economic projects.

It disagrees that it has to have the agreement of the Chinese before disposing of any land.

''Our position is that we are prepared to take into account the legitimate needs of the Chinese Garrison after 1997 and the socio-economic needs of the people of Hongkong,'' said Chris Osborne, spokesman for the British side of the JLG.

''What they do with it then is up to them. These are very valuable sites.'' The 7,000-strong British Forces occupy more than 2,800 hectares in the territory, about three-quarters of which are at the Castle Peak Firing Range in the New Territories.

The jewel in the crown is the Prince of Wales Barracks in the heart of Central. Most of Central was once a naval dockyard.

In the overheated market of 1989, Vigers property valuers estimated the total value of the defence estate at $78 billion.

They revised their figures downwards last year to about $60 billion because of the impact of tough new planning restrictions and other market-affecting developments.

This year, however, David Faulkner, partner of Brooke Hillier Parker, put the total at a hefty $81 billion.

This included $19.3 billion for the Prince of Wales Barracks (valued at $22 billion in 1989 and $16 billion in 1992) and $15.6 billion for Stanley Fort (valued at $13.85 billion in 1989 and $14 billion in 1992).

Mr Faulkner said there was still a huge demand for offices and housing, particularly at the luxury end.

''These are the two sectors which have done particularly well in the past year. The cost of offices has risen 20 to 25 per cent, and luxury housing a little less.

''I think they will continue to rise for the next two or three years.'' Mr Faulkner predicted there would be a re-adjustment in prices when the Chinese raised their flag here, but that it would be short-lived - so long as the economy remained steady - because of the shortage of land available for development.

''The people who were going to move out have, by and large, done so. The Chinese will bring money into the territory. It's very much a supply-and-demand situation here,'' he said.

Lyall Alexander-Webber, director in the valuation department at Vigers, said: ''Hongkong has a land shortage. It is also a growing population, a population growing in affluence and expectation, as well.

''It wants more facilities. Some of this land would be suitable for redevelopment. This land represents a major asset.'' However, he issued a note of caution to developers hoping to relive the heady days of 1989.

''Planning laws have changed since then. There won't be a quick return. It would be an opportunity for the community not just to make a bit of money. You don't say the army moves out today; we sell the place tomorrow and we put a cheque in the bank.'' He added that the impact of putting large tracts of real estate on to the market at once would flood it, with predictable consequences on prices.

He said some of the land, for example at Stanley Fort, would need longer-term development to allow time for the infrastructure, such as improved roads, to be built.

''Developments need to be balanced and phased in over years to be successful. Look at the Victoria Centre. It took 15 years to complete. It's not so easy to make a quick profit.'' Michael Clarke, managing director of Chung Sen Surveyors, said there would be a lot of interest in the sites, many of which are in prime locations.

''Land is one of Hongkong's most precious resources - and most profitable. Undoubtedly, prices have escalated quite considerably since 1989. There have been changes in development restrictions, but prices have probably almost doubled by now.'' Mr Clarke said he would be keen to get his hands on the Stanley Fort area, which he said would lend itself to lucrative residential development. There was also a lot of interest in the Prince of Wales Barracks.

Some Legislative Councillors would like to see the land developed for public housing and other social projects.

There are also fears that the presence of the PLA could raise tensions because so many people still remembered the Tiananmen Square massacre.

James To Kun-sun, United Democrats' spokesman on security affairs, called for the talks on the future of the defence estate to be less secretive.

He said the people of Hongkong should be permitted to contribute to the debate.

''This is not a sensitive matter. It is the land of the Hongkong people. We must increase the transparency of the discussions so the people of Hongkong can put forward their views: both ordinary people and developers.

''There are many suggestions. The land could be used for public housing or a playground or a community centre.

''It is not necessary to have so many PLA here because there is no serious risk of aggression from outside. It is not compatible to have so many PLA stationed in a financial and commercial district.''