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How the World’s Most Expensive Skyscraper Deal Turned Sour

  • Hong Kong’s The Center hit by high vacancies, low rents
  • Protests, pandemic stifle sales after $5.2 billion deal
The Center on Hong Kong island.
The Center on Hong Kong island.Photographer: Jerome Favre/Bloomberg
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There’s a saying in Hong Kong property circles that if the city’s richest man, Li Ka-shing, is selling, you don’t want to be the buyer.

Now, a group of investors who paid $5.2 billion for Li’s stake in The Center almost three years ago -- making it the world’s most expensive skyscraper -- is finding out why. After initially making quick profits flipping floors in the 73-story tower, the combination of anti-government protests, the coronavirus pandemic and escalating U.S.-China tensions has seen vacancies surge, rents drop and dealmaking dry up.

Just one sale has been made this year -- at a 35% discount to early 2019 prices, according to property-data provider Real Capital Analytics. Almost one-fifth of the building is empty -- one of the highest vacancy rates in Hong Kong’s sought-after central business district -- and rents are down about 20% from a year ago.