HONG KONG -- For decades, tying one's name to a piece of Central in the heart of Hong Kong's financial district has been the holy grail for Chinese executives.
Whether impressing a client, or vexing a rival, nothing has paraded success like an address in the world's most expensive business district, where rents this year ranked 45% higher than London's West End, and 63% higher than Midtown Manhattan.
So keen for a Central address was Chinese conglomerate HNA Group that in 2017 it signed a nine-year lease for eight floors at Three Exchange Square, overlooking Victoria Harbour, for $1.5 million a month.
"The idea was to have a prime office in Hong Kong's prime business district," one former HNA Group executive told Nikkei Asian Review, adding that the Hainan-based company also wanted to consolidate its Hong Kong operations into the one iconic building.
But when China introduced tighter capital controls in an attempt to clamp down on overseas deals, and the U.S.-China trade-war began to hit the world economy, Hong Kong's momentum showed signs of slowing.
And then came the protest movement that has turned Hong Kong into a battlefield and tested Beijing's control of the special administrative region.
The smashed barricades, blazing fires and flying rubber bullets have also sent waves of panic through the city's business elite, who are starting to question wonder if it's really worth paying all that money to be at the center of something so volatile.
For the first time in years, property prices are falling, with the latest transaction figures showing mainland companies largely shying away from taking new space in Central this year, with many smaller firms cutting rental spaces to save costs.
According to property agency Cushman & Wakefield, in the first three quarters this year, only 14% of the office space in the Greater Central area -- which includes the adjacent Sheung Wan and Admiralty districts -- were leased to mainland tenants, compared to 58% last year and 57% in 2017.
The slump is also denting the fortunes of Central's obscenely wealthy landlords. After posting their first decline since 2014 in the second quarter, office rents fell 3.2% in the third quarter, the steepest fall in seven years.
Another gloomy portent was a spike in availability, which rose to 14-year-high of 7.4% in September compared to below 4% for the same period last year, Cushman & Wakefield data shows.
"This means that much of the space made newly available has not been taken by other tenants," said John Siu, Hong Kong managing director at Cushman & Wakefield.
According to Siu, landlords will either have to lower the rent substantially, or start subdividing large spaces into smaller units, to attract new tenants. "To find occupiers for that kind of big size space is very unlikely," Siu said.
While many blame the escalation of U.S.- China trade war for the slowing demand for upmarket office space from mainland companies, the social unrest roiling the city isn't helping things either.
"The recent violent confrontations in Hong Kong is making the market sentiment even worse," said Marcos Chan, head of research at commercial real estate services company CBRE Hong Kong. "The demand has dried up," he said, adding that more companies are expected to give up leases if the protests continue.
Chan said that with the the trade war already forcing many mainland companies to either delay or cancel their office expansion plans, and some small and medium-sized mainland financial institutions starting to downsize their offices in anticipation of a weaker business environment, he expects office rents in Central to drop by up to 15% by the end of next year compared to this year's peak.
Mainland Chinese companies are not the only ones feeling skittish. Western banking houses, law firms and other white collar tenants are also fleeing Central at a faster rate.
In addition to the financial pressures brought by the economic downturn, Chan said the increasing supply of quality office buildings elsewhere was an added incentive for companies to move.
And the savings are huge, with the average office rent in Central double that of nearby Wan Chai and Causeway Bay, and three times more expensive than offices in eastern Hong Kong Island just a 15 minute drive away.
Earlier this year, Baker McKenzie, the world's largest law firm by headcount, added its name to the list of tenants departing Central -- where it had been based for 45 years -- for a 68-storey triple Grade-A office tower in Quarry Bay.
"Quarry Bay is fast becoming a major commercial hub to where many of our clients and potential clients are looking to set up their offices," said Steven Sieker, managing partner of Baker McKenzie's Hong Kong office, told Nikkei.
"It paved the way for us to stay close to and connected with clients," he said, adding that while the attractive rent was the main driver of the decision to move, the growth potential for new business was also a factor.
Around the same time rival law firm Reed Smith also opted to leave Central for Quarry Bay to take up space in an office compound developed by Swire Properties.
Even the Securities and Futures Commission, the city's market regulator, is also leaving Central early next year.
The move is expected to save the agency more than 100 million Hong Kong dollars ($12.8 million) in rents every year, with its new office in Quarry Bay costing half what its currently paying for a seven storey space in the famous Cheung Kong Center in Central.
U.S. shared workspace group WeWork, which currently has nine centers in Hong Kong including one in Central's LKF Tower, told Nikkei it is scheduled to open another five workspaces in Hong Kong by the end of the year, including an extra center in Central.
The accelerating company exodus has raised a question over whether Central can maintain its reputation as Hong Kong's home to blue-chip multinationals.
Hongkong Land, a part of Jardine Matheson Holdings and a major landlord which controls 450,000 square meter of prime Central real estate including The Landmark and Exchange Square office towers, says it remains confident about the district's appeal, despite the current downturn.
Jardine Matheson, which is listed in Singapore, has seen its share price shrink 28 percent this year, after the company's first-half earnings missed market expectations in August.
"Hongkong Land does not see any solid evidence showing the diminishing role of Central as a prime business district," said a Hongkong Land spokesman, citing the area's prestige, convenience, and availability of high quality buildings and services.
"The current market activities have slowed mainly due to uncertainties in macro environment caused by factors such as Sino-US trade negotiations," he added, but the city "remains fundamentally sound."
As for HNA Group, the exuberance that led the company to sign such an exorbitant lease in Central -- and at the same time amass debts totaling around 700 billion yuan ($100 billion) figure as of the end of June 2019 -- appears to have been tempered.
None of HNA Group's employees ever ended up setting foot in Three Exchange Square, with the company forced to give up the lease last September to help pay down debt.
For those workers who have not been laid off or fired as the company struggles to rein in costs, HNA Group has ended up in much less salubrious digs in Wong Chuk Hang on the southern side of Hong Kong Island.
Contributing writer Eduardo Baptista contributed to this article.