Nancy Li Lippo centre in Admiralty saw the rent for the whole of one of its floors decrease by 30 percent to about HK$467,200 a month, or HK$37 per square foot, recently. That's a retrogression to the level of nine years ago. The floor in question is the 14th, and the lessee has been a long-term tenant, having occupied the 12,627-square-foot space since 2006 after many renewals.
While the rent had remained at HK$681,858 a month since the last time that pens were put to a contract in 2015, the latest renewal, which is effective from this month to July 2028, is seeing the monthly payable plunge to HK$467,199. Tenancies are not the only malaise for owners at the landmark. Before details of this rental deal surfaced, a unit sold at a 14-year low of HK$14,852 psf, a 64-percent plunge from the peak of about HK$41,500 in October 2018, when rooms one, two and eight, which offered 5,794 sq ft, on the 36th floor of tower one went for HK$240 million.
Rental and sale prices for grade-A offices have generally been dropping sharply to levels of more than 10 years ago, and lower-priced tenancies have been surfacing nore frequently as market demand has shrunk due to the economic downturn. Tenants tend to prefer renovated properties for the potential cost savings that they offer, and some landlords are offering rent reductions to hold on to long-time tenants during times of lease renewals. Room 3709, a 2,700-sq-ft space, in Lippo Centre's tower two was sold off for HK$40.
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