Rents at The Center, Hong Kong's most expensive office tower, cut by 5 per cent as companies defer expansion plans amid protests

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3024588/rents-center-hong-kongs-most-expensive-office-tower-cut-5?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 11, 2019 11:57 AM SGT
Some owners of individual floors at The Center have cut rents by 5 per cent for the first time since they took over Hong Kong's most expensive grade A office building, as anti-government protests have forced companies to hold back their expansion plans, according to agents.
Rents at a number of buildings have also been reduced, including Bank of China Tower, where asking lease rates have been cut by 4.3 per cent to HK$156 in July compared to June, according to figures from CBRE.
Rents at the 73-storey iconic tower for mid-level floors without sea views dropped to below HK$100 per sq ft in July after negotiations between tenants and landlords, said Freddy Ho, senior sales manager at Centaline Commercial, who is familiar with a recent lease deal of 2,500 sq ft at about HK$95 per sq ft.
CK Asset Holdings sold a 75 per cent stake of The Center for a record HK$40.2 billion (US$5.15 billion) in November 2017. The deal was completed in May 2018.
The buyer of Hong Kong's fifth-tallest building is CHMT Peaceful Development Asia Property. Under the deal, the consortium comprising 10 investors bought 1.22 million sq ft of office space in the building at HK$32,900 per square foot.
"Some owners have noticed the recent market sentiment and adjusted rents downwards by about 5 per cent to more realistic levels accepted in the area," Ho said. "Some time after the movement started, they felt the leasing momentum slowed down."
The Center had a vacancy rate of 11.7 per cent as of late August, according to agency Midland IC&I.
Anti-government protesters form a human chain in Central, dubbed the "Hong Kong Way", on August 23, 2019. Photo: Dickson Lee alt=Anti-government protesters form a human chain in Central, dubbed the "Hong Kong Way", on August 23, 2019. Photo: Dickson Lee
The vacancy rate had tripled to a record high of 13.1 per cent in April within six...