Sales and prices of grade-A office space in Admiralty have fallen as a result of a doubling of stamp duties payable on the sale of non-residential properties.
"The measures taken at the end of February have definitely cooled the office market down," said Desmond Poon Chi-ming, associate director at Chartersince Surveyors.
"Immediately after the Chinese [Lunar] New Year holiday … we were recording one transaction every day. But the market turned quiet after the measures were released."
The new measures were effective from February 22 as part of a package aimed at curbing price rises in both the commercial and home markets.
According to Chartersince, there were 12 office transactions in the Lippo Centre in Admiralty in February. Since then, only four units have changed hands.
Last week a 1,100 sq ft office area in the centre was sold for HK$18.98 million, or HK$17,255 per sq ft. "In February the unit was worth at least HK$20,000 per sq ft [or about HK$22 million]. You couldn't buy any unit for less than that at the time," Poon said. A 2,087 sq ft office unit in Lippo Centre's Tower 2 sold for HK$33.81 million or HK$16,200 per sq ft in the middle of last month. That was 14.74 per cent below the vendor's previous asking price of HK$19,000 per sq ft.
"Only speculators are currently accepting lower offers for their units. They planned to sell their properties by confirmor sale from the beginning," Poon said. Confirmor sales are deals in which a property is resold before the original transaction is completed.
Daniel Wong Hon-shing, chief executive at commercial property agency Midland IC&I, said many vendors of office properties were previously optimistic.
"Before the measures they were asking for premium prices ranging between HK$21,000 and HK$22,000 per sq ft, which proved unrealistic once the government released the new measures," he said. Asking prices had since been cut to between HK$18,000 and HK$19,000 per sq ft.
"Now their asking prices are becoming more reasonable, but many sellers are reluctant to accept any further cuts as they are not in immediate need of cash and are still able to enjoy a rental yield of at least 3 per cent based on the current office rent of HK$45 per sq ft.
"At the same time, investors are looking for bigger discounts on price as they worry the government will release new cooling measures. We have received many offers for offices pitched at prices of about HK$16,000 per sq ft, but vendors are refusing to accept them," Wong said.