Economically the new buildings by the competitors were much less expensive for the tenants, offering them an incentive to purchase interest and stake in the competitor’s buildings. The prices offered by the company to its tenants and customers were considerably high due to the brand name of HKL as well as the high cost of maintenance and keep up of the aging buildings. Aside from this the assets also faced threats from the economy in the form of declining rental values in the Hong Kong region. This was brought on by the Asian economic crisis. Moreover the fluctuating rental demand at the time of the return of Hong Kong toChinaalso contributed towards the decreasing demand of the assets of the HKL and their resultant obsolescent the market.
Generally the long term prospects of a building based on the location of the real estate pertain to the access the property has to the roads and the public transportation networks the kind of market the location targets and the competitive position the location has in the region pertaining to the space, the feasibility of rental and retail customers demanding vacancies in the region as well as the investment in the region by the foreign and well as the local affluent and prospering businesses