GREAT Eagle Holdings says it is considering bidding for two Mass Transit Railway Corp commercial property development contracts at Kowloon and Central stations on the Chek Lap Kok line. Despite abstaining from the battle raging for the Tung Chung and Tai Kok Tsui station development contracts - also on the Chek Lap Kok line - Great Eagle assistant director Adrian Lee Ching-ming said the firm was still interested in large real estate projects. 'We are interested in the mammoth commercial projects,' said Mr Lee, referring to the Central and Kowloon stations as investment opportunities the company was studying. 'We have not submitted the offer to tender the projects at Tung Chung and Tai Kok Tsui stations because those are mainly earmarked for massive residential developments,' he said. As a property investment firm with a long track record in the commercial property sector, Mr Lee said the company would prefer to invest in the commercial property sector, in which the company felt optimistic, rather than the residential sector. Mr Lee's buoyant forecast for the commercial sector is in stark contrast to gloomy predictions from some analysts who believe there will be oversupply in the office market. According to Great Eagle's in-house research, new supply of office space in Central, Wan Chai and Causeway Bay this year and next will total about 70,000 sq ft. It anticipates a supply of between 850,000 and 120,000 sq ft in 1996 and 1997 respectively while a further 3.15 million sq ft will come in the following three years from 1998 to 2000. Grade A office rental levels will have a direct impact on Great Eagle's earnings because the company owns a number of prime commercial premises including Citibank Plaza in Central and Great Eagle Centre in Wan Chai. Like other property companies, its shares have taken a beating in the past few weeks because of the market's pessimistic view over the commercial sector. 'Property investment stocks have been oversold as they are trading at a large discount of about 40 to 50 per cent to their net asset values,' said Mr Lee. The prospects of property investment companies were not as poor as the market expected, he said. Moreover, Mr Lee said the company's multi-billion dollar urban renewal scheme in Mongkok was under way. The 1.94 million sq ft project is a joint venture with the Land Development Corp. Mr Lee said the company hoped all properties involved in the renewal scheme would have been acquired by next June. But in China, the company's property projects on top of Guangzhou Huangsha station is said to be postponed because of cautious investment sentiment in the region.
