The commercial real estate market is still grappling with elevated vacancies particularly outside more central areas
Published Mon, Jun 29, 2026 · 11:17 AM
[HONG KONG] A commercial complex in an industrial neighbourhood of Hong Kong has become the latest flashpoint in a commercial property market struggling with pockets of weakness, even as the broader real estate market rebounds.
Investment firm Ares Management and developer New World Development, which co-own the office-and-retail tower 83 Wing Hong Street, have recently dropped prices to offload some units in the development, people familiar with the matter said. The project is in the Cheung Sha Wan area of Kowloon about 20 minutes by train from Central.
They cut some asking prices including discounts and rebates by as much as about 57 per cent from when the project launched in 2024, according to the people, who asked not to be identified discussing private matters. While sales have picked up after the discounts, the situation shows the challenges commercial property owners in less core areas have had making deals, the people said. Ares declined to comment, and there was no response from New World to a request for comment.
Hong Kong property investors must increasingly navigate cross currents: the commercial real estate market is still grappling with elevated vacancies particularly outside more central areas, even as the residential sector enjoys a broad-based rebound.
Vacancies of office buildings stood close to an all-time high at 16.8 per cent at the end of March, according to CBRE Group, due to a wave of newly opened offices. Meanwhile, an index of private retail properties’ rents fell about 2 per cent from a year earlier in April, while a price index slumped roughly 14 per cent, according to government statistics.
In another recent case, Lifestyle International Holdings, operator of Sogo department stores in the city, refinanced a loan backed by its Causeway Bay flagship just hours before a deadline, adding to signs of lender caution. More broadly in Hong Kong, banks have increasingly turned to last-resort measures to clean up a record pile of bad debt.
As for the project in Cheung Sha Wan, New World and Ares have in recent weeks offered some units at a price as low as HK$5,600 (SGD 924) per square foot after discounts and rebates, with others selling at about HK$7,000, the people said. That’s down from about HK$13,000 per square foot when sales first launched in 2024. The prices are also below what New World originally paid for the land site in 2017, which worked out to about HK$8,000 per square foot.
The situation has also underscored the challenging decision-making facing lenders tied to such projects.
Standard Chartered, which extended a loan of about US$200 million to Ares in 2022 for the project, recently sounded out private credit investors as it considered offloading the facility, though it’s unclear if discussions advanced, people familiar with the matter said. The bank also discussed terms with Ares for potentially rolling over the loan, which comes due in October. Part of the loan was previously repaid.
SEE ALSO
Standard Chartered declined to comment when asked about the matter. BLOOMBERG