Jefferies Vacates HK Office Space At Cheung Kong Center
HONG KONG – Jefferies Financial Group has left its office space at Cheung Kong Center, a 68-storey office tower in Central owned by CK Hutchison Holdings, reported Bloomberg on Thursday morning (8 December, SGT).
The American investment bank, which has moved to the 2nd tower of the International Finance Centre (IFC), was one of the major financial tenants in Cheung Kong Center, the flagship property of CK Hutchison Holdings, which in turn is controlled by billionaire Li Ka-shing.
The departure is another blow to Li Ka-shing’s office building, which has seen an exodus of occupants over the past few years. Based on data from Midland IC&I, office vacancy at the Cheung Kong Center has surged from 5.4 percent in mid-2020 to a whopping 21 percent in September 2022.
The dismal situation in the office tower coincided with a drop of office rents across Hong Kong during the COVID-19 pandemic amidst rising office vacancy.
According to Colliers, office rents in Central fell by 26 percent in September compared to its peak in 2019. In addition, statistics from CBRE showed that the total amount of vacant Grade A office space in the Chinese territory has nearly increased by 3-fold in three years to a record high of 11.9 million sq ft as of October 2022.
Knight Frank’s Executive Director in Hong Kong, Wendy Lau, said the record-high vacancy rate in Central, coupled with the huge amount of upcoming office supply in the next two years, would further drag down office rents.
“In the short term, some relatively aggressive landlords will deploy substantial price reductions to attract tenants, and a round of price reduction war can possibly happen,” she added.