The Real Deal New York

Debt-saddled HNA Group is giving up its pricey offices in Hong Kong

Debt-laden Chinese conglomerate never moved into space
September 12, 2018 12:00PM

HNA Chairman Chen Feng and Three Exchange Square in Hong Kong (Credit: Wikipedia)

HNA Group is giving up more than 80,000 square feet of office space it leased in Hong Kong but never moved into.

The debt-saddled Chinese conglomerate signed a nine-year lease at Three Exchange Square that started in June, Bloomberg News reported. But HNA Group never built out the space or moved in, and some of the floors are now being marketed to new tenants, people familiar with the matter told Bloomberg.

HNA was said to pay more than $1.5 million a month in rent for the eight floors spanning 88,000 square feet in the building owned by Hongkong Land Holdings Ltd.

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Hong Kong’s Central district is the most expensive office market in the world, and Colliers International’s David Wood said the space should go relatively quickly.

“There are still a number of mainland firms looking to consolidate operations,” he said. “A lot of tenants in Hongkong Land’s portfolio looking for expansion space have struggled to find it because the vacancy rate is so tight.”

HNA has sold more than $17 billion of assets this year as it looks to steady its balance sheet. [Bloomberg] – Rich Bockman