DBS now has 14 floors in The Center (Image: Hong Kong govt)

Hong Kong’s struggling commercial property market continues to offer cut-rate deals for companies ready to buy their own office space, with Singapore’s DBS Bank is set to acquire an additional six floors in The Center on Queen’s Road for around half of the 2017 price in the city’s largest office transaction so far this year.

Already the owner of eight floors in the Sheung Wan skyscraper, Singapore’s largest bank agreed late last month to purchase floors 32, 36, 37, 56, 62 and 76 in The Center from entities linked to Hui Wing Mau, the indebted chairman of developer Shimao Group, for HK$2.62 billion ($334 million), according to Land Registry records filed on Tuesday.

“This purchase, when completed, will position us well to further scale our business operations, ensuring we can better serve our customers and contribute to Hong Kong’s ongoing success,” Sebastian Paredes, head of North Asia and chief executive of DBS Hong Kong said in a statement. 

Hui had been among a consortium of investors who teamed up to purchase The Center from Li Ka-shing’s CK Asset in 2017 for HK$40.2 billion, paying an average of around HK$33,000 per square foot. Hui sold his six floors at an average price of HK$17,238 per square foot, indicating a 48 percent discount from acquisition cost. 

With Shimao having previously been sued by Singapore’s UOB over delinquent debts in Hong Kong, Hui has been liquidating assets to pay his bills, and DBS held mortgages on all six of the floors in this latest transaction after Hui had taken a HK$2.78 billion loan from the bank in 2024.  

From Lender to Owner

DBS pointed out that the purchase provides an opportunity to consolidate its front office teams in Hong Kong closer to its clients and make available space for the planned alignment and expansion of high-growth business lines, especially its wealth management business.

Sebastian Paredes of DBS will be moving more of his team into Central (Image: DBS)

Already operating its Hong Kong headquarters in The Center, DBS is said to have previously been exploring opportunities to relocate staff currently based in Kwun Tong and Quarry Bay offices into Sun Hung Kai Properties’ International Gateway Centre atop the high speed rail terminus in West Kowloon. 

Now DBS will have 14 of the 73 floors in The Center, the bank will have 151,934 square feet (14,115 square metres) of gross floor area to accommodate its team. (The Center’s floor numbers reach to 79, as the developer decided not to assign floor numbers 13, or any number which ends in ‘4,’ for marketing purposes).

Having purchased several lower zone floors in The Center shortly after its 1998 completion, DBS in 2024 paid HK$27,000 per square foot to purchase the 75th storey and HK$26,000 per square foot for the 66th floor, with both levels acquired from Hong Kong’s ‘Cassette King’ David Chan Ping-chi.

DBS’ purchase follows a theme of owner occupiers making Hong Kong’s largest commercial property investments in recent months, such as the $925 million purchase last year of the top 13 floors in a Causeway Bay office building by Alibaba Group and its Ant Group affiliate with the tech giant claiming the space for its Hong Kong headquarters. 

In December, China’s JD.com also acquired a new home for its Hong Kong operation by purchasing half of the CCB Tower in Central for $449 million. During that same month City University of Hong Kong purchased the office component of the Festival Walk complex in Kowloon Tong, paying HK$1.96 billion to expand its campus. 

Shimao Still Selling

Hui had put levels 31 and 32 in The Center on the market in early 2022 at an asking price of around HK$32,000 per square foot, and had sought a buyer for the 37th floor in early 2022 at HK$22,000 per square foot, with DBS’s HK$17,238 per square foot purchase price reflecting a 22 to 46 percent markdown from those asking prices.

This latest disposal comes after Shimao Group reported RMB 92.5 billion ($13 billion) of overdue debt as of 31 December, with the company founder having sold major assets in recent months.

The struggling tycoon started marketing units on the 55th floor in The Center in the middle of last year and is said to have raised HK$433 million in cash so far from the sale of 10 of those rooms.

In February, Shimao Group sold the 38th floor of Lippo Centre Tower One in Admiralty – previously used as the firm’s Hong Kong headquarters – to Hong Kong developer Great Eagle for HK$251 million, booking an over 50 percent loss from its purchase price.

In July last year Hui sold 175 Liverpool Street in Sydney to Australian builder Lendlease for an undisclosed sum after having purchased the office tower in 2014 for the equivalent of $339 million.

Signs of Recovery

DBS is making the purchase as grade A office rents in Hong Kong’s greater Central area rose 5.5 percent in the January to March period from the end of 2025, according to Cushman & Wakefield. 

With Hong Kong’s IPO market recording a sixfold increase in funds raised in the first quarter from a year earlier, analysts see the market surge helping to boost rents further in Central district, the city’s traditional finance hub.

“The Grade A office market has been gaining momentum steadily since the second half of last year, with a string of large-scale transactions recorded successively. DBS Bank’s large-scale acquisition of Grade A office space this time, coupled with transactions seen recently in prime strata-titled commercial buildings on the Hong Kong Island, indicates that the Grade A office market has found support,” said Stanley Poon, managing director of the industrial and commercial unit of Hong Kong-based Centaline Property.