As Hong Kong protests hit business, landlords offer HK$1 rents in city's most expensive office towers

By Pearl Liu / | October 29, 2019 12:24 PM SGT
Landlords are getting desperate in their attempts to attract tenants to their offices in Hong Kong, as more than four months of civic unrest have deterred many companies " especially mainland Chinese tenants more willing to pay top dollar for marquee addresses " from expanding their businesses in the world's costliest commercial property market.
Extra sweeteners are the order of the day, real estate agents said, especially for buildings that lack the cachet of famous anchor tenants, as landlords throw in incentives to persuade reluctant tenants to commit.
Some owners are willing to charge a token HK$1, and up to HK$100 per month, for the first three months of occupation, adding the sweetener to the usual rent-free period that applies for corporate tenants, said Colliers International's head of office services Fiona Ngan.
"Some second-tier offices and buildings with multiple owners in Central are now thinking of offering license periods of between one and up to three months, for anything between HK$1 and HK$100 to lure tenants amid the dire market condition," she said.
The desperation underscores how Hong Kong's worst political crisis in decades has disrupted the decade-long bull run in the city's property market, causing the prices of new apartments, lived-in homes, retail space and commercial offices to fall across the city.
Protest rallies that began in early June have since deteriorated into regular street clashes, with the police firing tear gas and deploying water canons to disperse the radical protesters who are resorting to vandalism and arson.
Hong Kong's services industry " the mainstay of the city's economy " is bearing the brunt of the aftermath of the civic unrest. Months of televised mayhem have deterred visitors, forced conferences and shows to be cancelled, and crimped retail sales and consumption, pushing the local economy toward a technical recession in the fiscal third quarter ending in December.
Median rental charge in the city, which topped the world in 2019 for the fourth successive year, is expected to drop 10 per cent next year, according to Morgan Stanley, which doubled its estimate on Monday, citing Hong Kong's weaker economic growth...