Office Floor In Admiralty Disposed At Record-low Price

HONG KONG – An office floor in Admiralty has changed hands for HK$193 million (US$25 million) or HK$18,161 psf, the lowest in five years amidst weak office market activity in the district, reported Mingtiandi on Thursday (12 August, SGT).

The 10,627 sq ft commercial property is located on level 13 of the Admiralty Centre Tower II, a 22-storey office tower located above the Admiralty MTR interchange.

The buyer is Hong Kong-listed developer Tomson Group, which acquired the asset from receivers acting on behalf of electronic parts trader Wai Chun Group Holdings.

Notably, the Grade A office floor was first put on the market for HK$29,000 psf in late-2021, before its price was reduced to HK$20,000 during the first quarter of this year. But Tomson Group’s offer for the commercial property that was just recently accepted marks a 37 percent discount to the asking price.

Comparatively, data from Jones Lang LaSalle (JLL) show that average prices of grade A offices in Hong Kong have plunged by 31.1 percent from its peak at the end-2018. Office rents in Central are also currently 28.3 percent below their peak in 2019.

JLL’s Head of strata-title office sales in Hong Kong Adrian Tang commented that the office floor was disposed at the low end of market expectation, as property investors tend to offer lower bids for commercial properties being divested by receivers. Another factor is Admiralty’s office investment market has been weak for the past year.

Versus prices before the mass demonstrations in 2019 and the start of the COVID-19 pandemic in 2020, the selling price for the latest transaction is 49 percent lower than the HK$29,924 psf fetched by another office floor in the same development in April 2017, based on separate data from Prime Property.

Furthermore, the office space acquired by Tomson Group only earned HK$3.9 million in rental income in 2021, down 10 percent from the HK$4.35 million recorded a year before.