<ARTICLE> 5
<CIK> 0000842741
<NAME> JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
       
                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               DEC-31-1996
<CASH>                                       2,771,818
<SECURITIES>                                         0
<RECEIVABLES>                                  165,654
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                             2,847,252
<PP&E>                                      33,353,075
<DEPRECIATION>                               4,649,036
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<CURRENT-LIABILITIES>                          380,841
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                             0
<OTHER-SE>                                  40,516,045
<TOTAL-LIABILITY-AND-EQUITY>                40,896,886
<SALES>                                              0
<TOTAL-REVENUES>                             4,454,686
<CGS>                                                0
<TOTAL-COSTS>                                  681,307
<OTHER-EXPENSES>                             1,157,362
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                              2,616,017
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                          2,616,017
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<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 2,616,017
<EPS-PRIMARY>                                     0.89
<EPS-DILUTED>                                     0.89