The Deal / Market Move

DBS Bank is acquiring six office floors at The Center on Queen's Road Central in Hong Kong for approximately HK$2.6 billion (US$334 million), snapping up the space from Shimao Group founder Hui Wing Mau at a price that underscores just how deeply Hong Kong's commercial property values have corrected. The Singapore lender is paying roughly HK$25,000 per square foot for the 104,000 square foot block — a discount of nearly 40 percent to the levels Hui paid when he amassed the floors during the market peak. The transaction ranks among the largest strata-title office deals in Hong Kong this year, and follows DBS's earlier purchase of floors in the same Central Grade A tower.

  • Transaction price: HK$2.6 billion (US$334 million)
  • Floor area: ~104,000 sq ft across six floors
  • Price PSF: ~HK$25,000
  • Discount to 2017 peak: ~40%
  • Building: The Center, 99 Queen's Road Central
  • Seller: Hui Wing Mau, Shimao Group founder

Market Context

The sale reflects the continuing distress gripping mainland Chinese tycoons who loaded up on Hong Kong trophy assets during the 2017-2019 boom. Hui was among 17 investors — a consortium dubbed "The Avengers" — who backed CK Asset Holdings' record-breaking HK$40.2 billion sale of The Center in 2017 at around HK$33,000 per square foot. With Shimao defaulting on US$11.8 billion of offshore debt in 2022 and its Hong Kong-listed unit still working through a restructuring plan, selling prime collateral at steep write-downs has become a recurring theme across the sector.

Hong Kong Grade A office vacancy climbed to 13.8 percent in the first quarter, according to data tracked by major agencies, with Central rents down roughly 35 percent from their 2019 peak. Capital values for strata floors in premium Central towers have slid even further, with several 2024 transactions closing below HK$20,000 per square foot. The weakness has opened a rare window for deep-pocketed owner-occupiers — particularly banks and insurers — to lock in long-term headquarters space at cyclical lows.

What This Means for Buyers / Investors

DBS's willingness to commit US$334 million signals conviction that Hong Kong Central pricing is close to a floor, at least for well-capitalised financial occupiers with decade-plus horizons. Owner-occupier demand has become the single most important source of liquidity for strata office stock, replacing the mainland family offices and private investors who dominated the last cycle. Expect more Southeast Asian banks, Middle Eastern sovereign funds, and Chinese state-backed financial institutions to probe similar opportunities in Pacific Place, Two IFC and Cheung Kong Center while distressed mainland sellers remain motivated.

For pure investors, the arithmetic is tougher. Net yields on Central Grade A strata sit between 3.0 and 3.5 percent, barely ahead of Hong Kong dollar deposit rates, meaning any return case depends on capital appreciation from here. Buyers should track refinancing calendars of Shimao, Country Garden and other mainland developers — the next wave of forced disposals will likely set the benchmark for where Central pricing ultimately bottoms.