Unfilled premium office towers reflect HK market’s woes

Cost cutting by international banks, slow return of mainland firms among factors

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HONG KONG - No one's property in Hong Kong epitomises pain in the office market better than real estate legend Li Ka-shing's.

CK Asset Holdings' crown jewel Cheung Kong Center in Central has been about a quarter empty for the past year, while its nearby new glassy tower has just 10 per cent of space leased.

While there are other towers in the area with higher vacancies, the struggles of Mr Li's premium properties reflect a prolonged weakness in Hong Kong's office market. The vacancy rate was at a historic high of 16.7 per cent in the first quarter, according to CBRE Group.

Office rental prices fell 35 per cent since the peak in 2019, its data shows.

Cheung Kong Center II, a smaller version of CK's headquarters building, has only a fraction of the space in its 41 floors rented since preleasing started last year, according to brokers who market for CK.

CK Asset's chairman Victor Li recently acknowledged that new demand for offices was not high in the short term, but he is confident in the future of Cheung Kong Center II.